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DOV Pharmaceutical, Inc. is a biopharmaceutical company focused on the discovery, acquisition, development and commercialization of novel drug candidates for central nervous system, or CNS, disorders. Our product candidates address some of the largest pharmaceutical markets in the world including insomnia, pain and depression.
DOV currently has three product candidates in various stages of clinical development by the Company, namely, bicifadine, DOV 21,947 and DOV 102,677. DOV has entered into collaborations for two additional DOV product candidates, indiplon and DOV 216,303, and is seeking a partner for a third product candidate, DOV diltiazem.
Bicifadine is the Company’s lead product candidate for the treatment of pain and the subject of an extensive clinical development program with two ongoing Phase III trials in patients with chronic low back pain, or CLBP. In addition, a Phase II exploratory trial was initiated in February 2006 for bicifadine in the treatment of osteoarthritis. Bicifadine already has demonstrated efficacy in Phase II and Phase III clinical trials involving moderate to severe pain following dental surgery and bunionectomy.
DOV 21,947, DOV's lead product candidate for depression, is a triple reuptake inhibitor, or TRI, and is expected to enter a 300-patient Phase II clinical trial in the third quarter of 2006. DOV 21,947 is related to DOV 216,303, another of our TRIs. We recently announced statistically significant efficacy results from a Phase II clinical trial with DOV 216,303 for the treatment of depression, and currently are evaluating the drug in a number of preclinical models to determine different indications for its further development. DOV 102,677 is another of our TRIs, for which the next study will be a Phase Ib clinical trial in normal volunteers and is scheduled for 2007.
We have partnered with Neurocrine for indiplon and Neurocrine has filed two NDAs for the use of this DOV compound for the treatment of insomnia. In May 2006, Neurocrine announced that the FDA had determined that indiplon 5 mg and 10 mg capsules were approvable and the 15 mg XR tablets were not approvable at that time. Neurocrine has since announced that it has completed its review of the indiplon action letters and has requested a meeting with the FDA to gain greater clarity. This meeting has not yet occurred. We also have partnered with Merck, for DOV 216,303 for the treatment of depression, anxiety and addiction and DOV 21,947 for all indications. In August 2005, we amended our 2004 license agreement with Merck so that we, instead of Merck, will undertake certain clinical development of DOV 21,947. Under this amendment, DOV retains the ability to achieve the original milestone payments and royalties on product sales, if any, in the event our development activities achieve results to be agreed upon with Merck. In addition, we also retained co-promotion rights for DOV 21,947 in the U.S. For more information regarding these collaborations, please the Significant Agreements section below.
DOV’s current capabilities enable the Company to take compounds from drug discovery through all stages of clinical development to NDA filing. Our core scientific expertise is in cellular and molecular pharmacology underlying neurotransmission. We have substantial clinical development expertise in our departments of clinical research, data management, biostatistics, medical writing, pharmaceutical development and regulatory affairs. Our senior management team has substantial experience in CNS drug discovery and development. Members of our management have participated in the discovery, development and commercialization of new drugs that have been successfully brought to market. In June 2006, we relocated our corporate headquarters to an approximately 133,000 square foot facility in Somerset, New Jersey. The new headquarters contains laboratory and pilot-scale manufacturing space.
Wyeth Agreement
In May 1998, we entered into a license agreement with Wyeth for certain rights to four compounds, indiplon, ocinaplon, bicifadine and DOV 216,303. If we do not sublicense a compound to a third party, we will be obligated to pay Wyeth 3.5% of net sales for ocinaplon 4.0% for 216,303 and 5.0% of net sales for bicifadine, and potential aggregate milestones of $4.5 million for DOV 216,303, $7.0 million for ocinaplon and $9.5 million for bicifadine. The royalty rate for bicifadine and ocinaplon will increase by 0.5% should we partner or sublicense that compound, in which case the next milestone payable to Wyeth for that compound will be accelerated to become due upon partnering.
Neurocrine Biosciences, Inc.
In June 1998, we sublicensed indiplon to Neurocrine on an exclusive, worldwide basis for ten years or, if later, the expiration of patents covering either the compound or the marketed product, currently 2023. At the end of the term, Neurocrine will be deemed to have a fully paid, royalty free license to the compound and the marketed product. We are entitled to receive a royalty equal to 3.5% of net sales for the later of the expiration of patents in such country and a period of the first ten years post launch in a given market, if any, and additional net milestone payments of up to approximately $1.5 million. Neurocrine had partnered with Pfizer to develop and commercialize indiplon, but announced in June 2006 that the two companies had terminated their collaboration agreement. DOV’s 3.5% royalty on worldwide sales remains intact.
Merck
On August 5, 2004, we entered into an agreement with Merck for the worldwide development and commercialization of DOV 21,947 for all therapeutic indications and of DOV 216,303 for the treatment of depression, anxiety and addiction. Additionally, Merck obtained rights of first offer and refusal regarding a licensing agreement for DOV 102,677 under certain circumstances and for additional consideration. Merck assumed financial responsibility for development and commercialization of a product containing at least one of the licensed compounds. The parties agreed to work together to clinically develop licensed product and we have reserved the right to co-promote the sales of product in the U.S. to psychiatrists and other specialists who treat depression.
Under the agreement, we received a $35.0 million up-front licensing payment. In addition, we could receive as much as $300.0 million for achieving certain clinical development and regulatory milestones for multiple territories and approval of two indications, and up to $120.0 million upon achievement of certain sales thresholds. Merck assumed responsibility for the development, manufacturing and commercialization of DOV 21,947 and agreed to pay us royalties on worldwide sales, if any, which increase based upon certain sales thresholds.
In August 2005, we announced that our license agreement with Merck for DOV 21,947 and DOV 216,303 had been amended. The milestones, royalties and business terms originally established in the August 2004 license agreement were retained in full along with DOV’s co-promote rights. The amendment transfers to us from Merck certain development contemplated by the license agreement. It also permits expansion of the parties’ relationship to include an additional TRI from the DOV preclinical pipeline for inclusion in the original license agreement with no additional upfront payment. If the DOV studies for DOV 21,947 are successful, we may be reimbursed by Merck for pre-agreed expenses and may receive a success premium. Subsequently, we could receive payment for achievement of certain clinical development and regulatory milestones pursuant to the existing agreement. Both parties retain certain termination rights.
Biovail Laboratories Incorporated and Biovail
In January 2001, we entered into a license, research and development agreement with Biovail to develop, manufacture and market DOV diltiazem. In March 2003 DOV and Biovail agreed to terminate the license agreement. The separation agreement provided for the return to us of the patent license covering DOV diltiazem and contingent payments by us to Biovail of $3.0 million upon issuance of marketing authorization for the drug and up to $7.5 million based upon sales, if any.
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