GlaxoSmithKline (GSK) and Concert Pharmaceuticals, a Massachusetts-based start-up company, announced today that they will collaborate to develop and commercialize deuterium-containing medicines. Concert is a clinical stage biotechnology company focused on the application of deuterium chemistry. While it has a broad research pipeline in several areas, its lead development candidate is the HIV protease inhibitor CTP-518.
The deal includes several of Concert's research and development programs, including the one for CTP-518, which is expected to enter Phase I clinical trials in the second half of 2009. Concert will also provide GSK with deuterium-modified versions of three compounds already in GSK's own pipeline.
In return, Concert will receive $35 million in upfront payments, including a $16.7 million equity investment by GSK. Later payments tied to various benchmarks could total more than $1 billion.
Sounds great for Concert, but what's in it for GSK? It's a question investors also seem to be asking, given that shares have fallen in response to the deal.
Well, first, the collaboration would increase GSK's pipeline of early-stage drugs. Under the terms, GSK gets exclusive worldwide licenses to all product candidates developed by the program (once the products have made it through the regulatory process, GSK assumes responsibility for production and commercialization). GSK believes that "Concert's approach to deuterium modification of medicines has broad potential to enhance certain drug properties and result in innovative new medicines." If GSK's trust in Concert is justified, the future payoff could be substantial.
Deuterium is a safe, non-radioactive relative of hydrogen that can be isolated from sea water. Because of its chemical properties, deuterium forms stronger chemical bonds, which may substantially improve many drugs' metabolic properties, potentially resulting in better safety, tolerance and efficacy. While the idea sounds pretty straight forward and simple, it hasn't really been tried much before, making Concert's offerings somewhat unique.As for CTP-518, it is purported to be a novel HIV protease inhibitor. A protease inhibitor prevents viral replication by inhibiting the activity of an enzyme used by the virus. CTP-518 is developed by replacing certain key hydrogen atoms of atazanavir (a protease inhibitor used to treat HIV) with deuterium. Pre-clinical studies showed that CTP-518 could potentially avoid the need to use a boosting agent such as ritonavir, which, while the current standard of care, comes with significant side effects.
What's not entirely clear about this deal is how it would mesh with GSK's recent deal with Pfizer (PFE) to merge their HIV operations into a new company focused solely on research, development and commercialization of AIDS medicines.
What is clear about GSK, however, is that is continually working to improve itself. In addition to the Concert and Pfizer moves, it recently acquired Stiefel Laboratories. On Monday, the FDA also announced approval for Lamictal, an extended-release tablet to be used as once-a-day add-on therapy for epilepsy patients. Despite the recent stock gyrations, all these developments make it a company to watch.