Titan Pharmaceuticals and Braeburn Pharmaceuticals sign license agreement worth up to $305 million

License grants Braeburn exclusive commercialization rights in the United States and Canada to the investigational product Probuphine, a novel, subdermal implant and the first long-acting product designed to deliver six months of the drug buprenorphine hydrochloride following a single treatment

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SOUTH SAN FRANCISCO, Calif.—Titan PharmaceuticalsInc. has signed a license agreement with Braeburn Pharmaceuticals Sprl thatgrants Braeburn exclusive commercialization rights in the United States andCanada to the investigational product Probuphine, a novel, subdermal implantand the first long-acting product designed to deliver six months of the drugbuprenorphine hydrochloride following a single treatment.
Braeburn is wholly owned by Apple Tree Partners IVL.P., a partnership affiliated with Apple Tree Partners, which was founded in1999 to create life-science companies. Through two predecessor partnerships,Apple Tree founded and built Aileron Therapeutics, Gloucester Pharmaceuticals(acquired by Celgene), HeartWare International and Tokai Pharmaceuticals. Thefirm intends to use the entirety of its recently closed partnership, Apple TreePartners IV, to build Apple Tree Consolidated Sprl, a holding company that willcreate and own complementary life sciences businesses, such as pharmaceuticals,medical devices and technology-enabled healthcare services. BraeburnPharmaceuticals will become a division of Apple Tree Consolidated.
Titan has received a non-refundable $15.75 millionupfront payment and will receive as much as $50 million upon the approval ofProbuphine by the U.S. Food and Drug Administration (FDA) for the treatment ofopioid dependence. Additionally, Titan will be eligible to receive as much as$130 million upon achievement of sales milestones and potentially another $35million in regulatory milestones for additional contemplated indications,including chronic pain.
Furthermore, Titan will receive tiered, double-digitpercentage royalties on net sales of Probuphine which is, it notes, "within arange that is customary for products at this stage." In addition to thepotential milestone payments, Apple Tree Partners IV has allocated more than $75million to launch, commercialize and continue the development of Probuphine.
On Oct. 29, 2012, Titan had announced thesubmission of a New Drug Application (NDA) to the FDA for Probuphine for themaintenance treatment of opioid dependence in adult patients.
"We believe this agreement with BraeburnPharmaceuticals offers a tremendous opportunity to accelerate thecommercialization of Probuphine and provides Titan with the financial resourcesto further advance our technology and pipeline," said Sunil Bhonsle,president of Titan. "While a broad range of pharmaceutical companiesexpressed interest in Probuphine, we found that the innovative model of the newcompany established by Apple Tree not only provides us with a value-driventransaction for Titan shareholders, but also brings to the process a seasonedteam of industry veterans with proven track records of launching andcommercializing important therapies, including controlled substances. The NorthAmerican Probuphine franchise will be launched and developed by a top-notchcommercialization team, maximizing the potential for its rapid acceptance inthe medical and patient community and a successful commercial launch for bothcompanies."
"The Board of Titan is extremely pleased withthis strategic partnering outcome and the path forward for Probuphine,"added Dr. Marc Rubin, executive chairman of Titan. "It is our ultimategoal to rapidly and efficiently advance Probuphine to the market and thepatients and clinicians who can benefit from safe and effective treatments foropioid addiction. Braeburn Pharmaceuticals has been formed with that same goaland we look forward to working with their team to achieve it."
Under the terms of the agreement, Titan willremain responsible for any expenses associated with the support of the currentNDA review process. Upon completion of the FDA review process, BraeburnPharmaceuticals will assume all responsibility for commercialization andfurther clinical development of Probuphine in the United States and Canada.
The Titan team is said to be "already interactingroutinely with the Braeburn team and will continue to assist through productlaunch as needed." Titan and Braeburn Pharmaceuticals will also have a jointdevelopment committee to oversee the overall strategic objectives and plansrelating to the development of Probuphine, including regulatory strategy withrespect to any Phase IV clinical trials, communications with regulatoryauthorities and clinical programs for chronic pain and any other potentialindications.
Some 2.3 million opioid addicts are estimated toexist in the United States, some 20 percent of whom are addicted to illicitopioids, such as heroin, while the other 80 percent are addicted toprescription drugs, such as oxycontin, methadone and codeine. Probuphine is aninvestigational subcutaneous implant that is "capable of delivering continuousand persistent, around-the-clock blood levels of buprenorphine for six monthsfollowing a single treatment, enhancing patient compliance and retention,"according to Titan. Buprenorphine, an approved agent for the treatment ofopioid dependence, is currently available in the form of daily dosed sublingualtablets and film formulations, with reported 2011 sales of $1.3 billion in theUnited States.

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