Under an alliance between the two companies, the development of nucleoside polymerase inhibitors for the treatment of chronic hepatitis C virus (HCV) infections is to become the prime focus of the deal.
Pharmasset is set to receive an up-front fee and potential milestone payments for PSI-6130, the lead nucleoside compound. Pharmasset is also receiving research and development support and additionally would receive royalties on sales if the product reaches the market.
The deal could be even more lucrative to Pharmasset as they could receive in excess of $300 million in milestone payments should Roche commit to alternative options outlined in the deal regarding nucleoside polymerase inhibitors.
In addition, the Roche Venture Fund made a $4 million investment in Pharmasset and received warrants to purchase an additional $6 million in shares at a premium price within the next two years.
Roche's investment in a compound that is essentially still in the research stage raises questions as to why they are willing to sink a significant amount of funding for the R&D of this treatment.
"We believe that nucleosides are likely to be an important new class of drugs in HCV treatment," said Jonathan Knowles, president of global research at Roche. "PSI-6130 fits perfectly within our virology portfolio."
One of the reasons behind Roche's interest is the potential PSI-6130 has in combating the hepatitis C virus, especially when used in combination with Roche's Pegasys and Copegus.
For patients not responding to today's standard of care therapy, the addition of nucleoside polymerase inhibitors like PSI-6130 to their treatment regimen may offer benefit.
Knowles added: "This therapy may offer benefits to patients who have previously been resistant to treatment, especially those with a difficult to treat virus."
Roche's Pegasys (peginterferon alfa-2a) is the most prescribed pegylated alpha interferon in the U.S. and Copegus (ribavirin, USP), were approved by the FDA in December 2002 for use in combination for the treatment of adults with chronic hepatitis C who have compensated liver disease and have not previously been treated with interferon alpha. Patients in whom efficacy was demonstrated included patients with compensated liver disease and histological evidence of cirrhosis.
Pegasys and Copegus, posted combined worldwide sales of €512.3 million in the first half of 2004. Less than one and a half years after its first launch Pegasys has now achieved global market leadership. The drug has been the subject of rapid uptake in major markets, including the United States.
The deal is also set to give Switzerland-based Roche worldwide rights, excluding Latin America and Korea, to PSI-6130 and its prodrugs. Pharmasset will be responsible for preclinical work, investigational new drug filings and Phase I proof-of-concept studies, with Roche managing other preclinical studies and clinical development.