Isotechnika Pharma signs $6m commercialization agreement for transplant organ rejection drug with 3SBio in China

Biopharmaceutical company Isotechnika Pharma (TSX: ISA) has signed a US$6 million development and commercialization agreement for its drug voclosporin, a calcineurin inhibitor being developed to prevent organ rejection following transplantation and the treatment of autoimmune diseases, with 3SBio Inc. (NASDAQ: SSRX), a  China-based biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products. Isotechnika, a company focused on the discovery and development of immune modulating therapeutics, will receive $1.5 million as an upfront non-refundable licensing payment, while $4.5 million will be invested by 3SBio through a three-year convertible debenture, which will pay interest of 7% semi-annually.

Isotechnika has the option to pay interest in cash or to issue new shares at the prevailing price when the interest is payable. 3SBio also has the right to convert the debenture into common equity of Isotechnika at any point in time at a conversion price of C$0.155 per share.

Under the terms of the agreement, Isotechnika will grant 3SBio exclusive rights to all transplant and autoimmune indications of voclosporin in China, including Hong Kong and Taiwan, excluding ophthalmic indications and medical devices, which were previously licensed to Lux Biosciences and Atrium Medical. Isotechnika will also provide, under separate agreement, commercial supply to 3SBio on a cost-plus basis. The drug developer will receive ongoing royalties based on  3SBio`s sales of voclosporin.

Meanwhile, 3SBio will be responsible for the clinical development, registration and commercialization of voclosporin in China.

"This agreement represents an important milestone for the continued development of voclosporin in transplantation indication worldwide after Isotechnika regained global rights of this product in 2008," commented president and CEO of Isotechnika Dr. Robert Foster.

3SBio`s commercial experience and franchise in nephrology in China is expected to benefit Isotechnika, said Foster. The company also continues to seek strategic partnerships in other regions, including Europe, North America and other areas in Asia, it said.

China`s transplant recipients are approximately 100,000 currently, but the population is growing by about 10,000 new patients per year.

The two companies will work together to prepare and file a dossier for SFDA regulatory approval to begin a phase III trial for the drug in China.

In April 2009, voclosporin completed a phase 2b North American trial for the prevention of kidney rejection following transplantation, as "New Onset Diabetes After Transplant  is common and has become a major concern in transplantation of all organs.

"Kidney transplantation represents approximately 60% of all solid organ transplants of which 93% require calcineurin inhibitors as part of their immunosuppressive regimen," added Foster.

Upon closing of the transaction, 3SBio will nominate one member to Isotechnika's board of directors.

3SBio`s focus is on addressing large markets with significant unmet medical needs in nephrology, oncology, supportive cancer care, inflammation and infectious diseases. With headquarters and manufacturing facilities in Shenyang, PRC, 3SBio employs over 500 people.