Nabi makes deal for smoking vaccine
Tuesday, November 17, 2009
The Rockville maker of an experimental nicotine vaccine has signed a licensing deal with pharmaceutical giant GlaxoSmithKline that could produce a huge payday if the anti-smoking drug can be successfully brought to market.
Nabi Bioparmaceuticals outlined the terms of the deal Monday. It said a unit of GlaxoSmithKline has agreed to pay $40 million initially for the exclusive worldwide licensing rights to the drug, called NicVax.
Nabi would receive additional money if it meets certain developmental and regulatory milestones, including the development of follow-up nicotine vaccines. Nabi would also earn double-digit royalties from sales if the product reaches the market.
All told, Nabi could collect more than $500 million from the development and sale of the vaccine and its successors, the company said.
"It's the biggest deal we've ever had," said Raafat Fahim, Nabi's president and chief executive. He added that NicVax would become the company's flagship product if it successfully passes final rounds of testing.
Nabi says its vaccine causes a body's immune system to produce antibodies that bind to nicotine molecules, making them too large to reach the brain's receptors. Because the nicotine antibodies circulate for long periods of time, Nabi said NicVax may also be effective in preventing smoking relapse.
This is Nabi's second major deal with GSK. Earlier this month, the company received $21.5 million from GSK for its experimental vaccine for staph infections. Nabi stands to receive an additional $26 million from GSK upon the successful completion of four milestones associated with the sale of PentaStaph.
Nabi is not the only company trying to develop an anti-smoking vaccine. Swiss pharmaceutical firm Novartis and Cytos Biotechnology have a similar product that recently failed to meet targets in a middle round of testing, leading analysts to worry that the drug will not reach the market. NicVax, by comparison, has recently entered final rounds of tests; the company expects to have results at the end of 2010.
Stephen Dunn, managing director of life science research at Jesup & Lamont, said Nabi "has a multi-year head start" in this field.
The transaction is subject to approval by Nabi shareholders; the company expects the transaction to be completed in the first quarter of 2010.
Nabi stock had been trading at under $3.60 before the announcement. The stock closed Monday at $4.50, up 26.4 percent.
Nabi had not been on the radar of many analysts, Dunn said: "Now's the start when people will sit up and take notice."