Agreements

Date: 2017-03-06

Type of information: Commercialisation agreement

Compound: ibalizumab

Company: Theratechnologies (Canada) TaiMed Biologics (Taiwan)

Therapeutic area: Infectious diseases

Type agreement: marketing - distribution

Action mechanism:

• monoclonal antibody. Ibalizumab is a CD4-directed HIV entry-inhibitor and is the first humanized monoclonal antibody in clinical trials for the treatment of HIV. Ibalizumab was designated a Breakthrough Therapy by the FDA based on preliminary clinical evidence indicating that it may represent a substantial improvement over existing therapies on one or more clinically significant endpoints. In a Phase IIb clinical trial, conducted on 113 patients, the product significantly reduced viral load in multi-drug resistant HIV-infected patients. The FDA has also granted ibalizumab Orphan Drug designation.

Disease: HIV infection

Details:

• • On March 18, 2016, Theratechnologies and TaiMed Biologics announced a 12-year collaboration agreement to market and distribute ibalizumab in the United States and in Canada.
• Ibalizumab is currently in a late-stage Phase III clinical trial. Over two-thirds of patients required for the open-label, 24- week trial have been enrolled. Patient screening for this study is anticipated to close later in March. The objective of this study is to reduce viral replication in patients with multi-drug resistant HIV infection. The primary endpoint of the Phase III trial is the proportion of patients achieving a 0.5 log decrease in viral load 7 days after initiating treatment. Once the Phase III trial is completed, ibalizumab will be evaluated under the FDA’s priority review process which is expected to be completed within six months of the application or during the first half of 2017.
• Pursuant to the terms of the agreement, Theratechnologies has exclusive rights to commercialize ibalizumab in the United States and in Canada. TaiMed will continue to be responsible for development of ibalizumab and seek approval from the FDA whereas Theratechnologies will be responsible to obtain the approval from Health Canada. TaiMed will manufacture and supply ibalizumab to Theratechnologies at a transfer price of 52% of net sales of the product.

Financial terms:

• The terms of the transaction include a US$2 million payment obligation, of which US$1 million was paid in cash at the signature of the agreement and US$1million will be paid at the commercial launch through the issuance of 957,169 common shares of Theratechnologies. A further US$8.5 million will become due at commercial launch, subject to certain conditions. This amount will be payable as follows: US$2 million in common shares of Theratechnologies at a price to be determined upon FDA approval and US$1 million in common shares of Theratechnologies at a price to be determined upon commercial launch, based on the volume-weighted average trading price of Theratechnologies’ common shares on the TSX prior to each of these dates and US$5.5 million, payable in quarterly installments based on a predetermined percentage of net sales during that quarter. Once sales have reached an aggregate amount of US$20 million over 4 consecutive quarters, Theratechnologies will make a US$7 million milestone payment (payable in two installments over one year). Theratechnologies will also pay additional sales related milestones; US$10 million once annual sales of ibalizumab reach US$200 million, US$40 million once annual sales reach US$500 million, and US$100 million once annual sales reach US$1 billion.
• Theratechnologies will also pay development milestones to TaiMed. A US$3 million milestone is due upon the approval of the twice-monthly (once every two weeks) intramuscular route of administration, again payable in two installments over one year.
• TaiMed will also be planning a larger Phase III trial with the once-monthly (once every four weeks) intramuscular or subcutaneous route of administration, to address a much broader patient population. This development milestone will consist of an upfront milestone payment of up to US$50 million, depending on the size of the newly targeted population, which will be paid quarterly, based on a percentage of net sales generatedby the product.

Latest news: • On March 6, 2017, Theratechnologies announced that it has reached an agreement with TaiMed Biologics. for the acquisition of the commercial rights to ibalizumab in the European Union, Israel, Norway, Russia and Switzerland. Theratechnologies first acquired the commercial rights to ibalizumab in the United States and Canada in March 2016. The existing agreement between both companies has been amended to include the additional territories and related new obligations. Under the terms of the agreement, Theratechnologies will assume regulatory responsibilities and associated costs. Clinical trial activity required by the EMA, if any, and associated costs will be the responsibility of TaiMed. Both parties have agreed to a transfer price of 52% for annual European sales up to $50M. The transfer price will increase to 57% on annual sales above the $50M threshold. The agreement also provides for development, launch and sales milestones including:

• an upfront payment of $3M payable through the issuance of 906,077 common shares of Theratechnologies;
• an approval milestone representing 50% of the cost of the clinical trials and all associated development activities required, if any, to obtain approval in Europe, payable through transfer price increase of 5% of net sales;
• a launch milestone payment of $10M, payable as follows: - $5M, one year after launch; and - $5M, one year after reaching European sales of $50M over four consecutive quarters;
• a milestone of $10M upon European sales reaching $150M over four consecutive quarters;
• a milestone of $20M upon European sales reaching $500M over four consecutive quarters;
• a milestone of $50M upon European sales reaching $1B over four consecutive quarters; The agreement has a 12-year term following marketing approval on a country-by-country basis. Theratechnologies intends to initiate discussions with the European Medicines Agency (EMA) as soon as possible to discuss the strategy in regards to the potential filing of an application.

Is general: Yes