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Symplmed Wins Rights from XOMA

Zacks Equity Research

XOMA Corporation (XOMA) recently announced that it has entered into an agreement with Symplmed Pharmaceuticals, LLC (founded by some ex- XOMA employees) to transfer the US development and marketing rights to the perindopril franchise to the latter. In exchange, XOMA will get a stake in Symplmed.

We note that the perindopril franchise includes Aceon (perindopril erbumine), an angiotensin converting enzyme (ACE) inhibitor and three other fixed dose combination (:FDC) candidates.

Aceon is approved for treating patients suffering from essential hypertension. The drug is also marketed for reducing the risk of cardiovascular death or nonfatal myocardial infarction in patients with stable coronary artery disease. Generic versions of the drug are available in the US since 2009.

As per the terms of the agreement, XOMA will be entitled to double-digit royalties on sales of FDC Aceon and Pfizer’s (PFE) Norvasc (amlodipine besylate).

We note that Symplmed was founded by ex-Xoma employees including Erik Emerson and Jeffrey Feldstein. They were responsible for the management of the phase III study PATH (Perindopril Amlodipine for the Treatment of Hypertension: n=837), which evaluated the candidate in patients suffering from hypertension. Encouraging results from the trial were presented in Nov 2012.

The phase III study compared the efficacy and safely of FDC Aceon/Norvasc with Aceon or Norvasc alone. Data from the study revealed a statistically significant reduction in both sitting diastolic and sitting systolic blood pressure in patients in the FDC arm compared to those treated with Aceon and Norvasc alone.

Symplmed plans to submit a new drug application (:NDA) to the US Food and Drug Administration (:FDA) for the candidate by year end. FDC Aceon/Norvasc is already marketed in 91 ex-US countries by Laboratoires Servier, a privately-owned French pharmaceutical company, under the trade name Coveram. Notably, in Jan 2011, XOMA inked a deal with Les Laboratoires Servier to acquire the US rights to the perindopril franchise from the latter.

XOMA carries a Zacks Rank #3 (Hold). Companies that currently look attractive include Santarus, Inc. (SNTS) and Jazz Pharmaceuticals (JAZZ). Both carry a Zacks Rank #1 (Strong Buy).

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