Upping the antibody ante

Novartis buys Protez in deal worth up to $400 million

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MALVERN, Pa.—In an effort to bolster its presence in the specialty field of hospital infections, Novartis International AG announced in June it will acquire antibiotic developer Protez Pharmaceuticals for up to $400 million in cash.

Under the terms of the agreement, Protez will become a stand-alone subsidiary of Novartis, maintaining its operations in Malvern, Pa., and will be paid $100 million at closing and up to $300 million in milestone payments.

The agreement provides Novartis with Protez's research expertise and product pipeline, including the North American and European rights to its lead product candidate PZ-601, an injectable antibiotic in the class of agents known as carbapenems that are useful in treating serious and often life-threatening infections caused by gram-negative and gram-positive bacteria. Per the agreement, Protez will continue to focus on the further development of PZ-601 as well as other anti-infectives in its pipeline.

The acquisition reinforces Novartis' pipeline in anti-infectives, which already includes approved medicines as well as development compounds for use in treating hospital-based infections and hepatitis, says Novartis CEO Joe Jimenez.

"Novartis has a long-standing commitment of bringing innovative medicines to severely ill patients and fighting infections that represent significant public health threats," Jimenez says. "The addition of Protez and its pipeline, including PZ-601, to our existing initiatives will further strengthen our position in the specialty field of hospital infections while helping to address the public health challenges of increasing bacterial resistance and high mortality rates."

Protez President and CEO Christopher M. Cashman says the acquisition underscores Protez's infectious disease expertise and novel antimicrobial programs.

"Protez has assembled a world-class team of scientists and clinicians focused on discovery and development of novel antimicrobial compounds targeting difficult-to-treat infections. Novartis is very interested in leveraging the expertise of the Protez team, our resources and our time-efficient business model to continue to advance our programs," Cashman says. "We have aggressive development timelines and are confident we will deliver by leveraging the capabilities of both organizations."

PZ-601 specifically has been shown to have a broad spectrum of activity that could offer broader efficacy over existing injectable antibiotics, especially against multi-drug resistant bacteria, including methicillin resistant Staphylococcus aureus (MRSA)—or "staph"—strains that are becoming an increasing public health challenge.

According to the Centers CDC, 2 million people in the U.S. develop hospital-acquired infections each year, and approximately 90,000 die as a result. In Europe, an estimated three million hospital-acquired infections occur each year, resulting in approximately 50,000 deaths.

In 2005, Protez entered an exclusive licensing agreement with Dainippon Sumitomo Pharma Co. Ltd. (DSP), which has expertise in carbapenem, to develop and commercialize PZ-601 in North America and Europe. Since that time, Protez, in collaboration with DSP, advanced the novel antibiotic to Phase II human clinical trials.

Protez commenced a 100-patient Phase II study for PZ-601 in May 2008 in the U.S. to evaluate the safety and efficacy of PZ-601 in patients with complicated skin and skin structure infections, including cellulites, abscesses, infected wounds and ulcers.

Novartis plans to start additional clinical trials for PZ-601, with the aim of first regulatory submissions in 2012. DDN

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