Replies to post #105744 on Biotech Values

[DewDiligence]

ITMN/Roche—My understanding, based on prior discussions with Dew, is that Roche had an HCV exclusivity deal with ITMN and therefore could not just walk away from the partnership with ITMN if Roche ever wanted to license an outside HCV compound. I.e., Roche had to pay ITMN to terminate its HCV exclusivity deal with ITMN in order to have the freedom to license an HCV compound from another company.

That’s correct for protease inhibitors, specifically—i.e. Roche could have licensed an HCV drug from another class without any obligation to ITMN.

That Roche was (IMO) willing to pay $175M to get out of the ITMN agreement tells me that Roche considers a protease inhibitor an obligate component of an all-oral HCV cocktail. Everyone in the HCV arena agrees except VRUS, who has been touting to investors the notion of a dual-nuke regimen without a third agent (#msg-54225312).

[turtlepower]

I see the following in the 10K regarding roche terminating the agreement

On October 16, 2006, we entered into the Collaboration Agreement with Roche. Under the Collaboration Agreement, we agreed to collaborate with Roche to develop and commercialize products from our HCV protease inhibitor program. The Collaboration Agreement includes our lead candidate compound RG7227, which completed Phase Ib clinical trials. We also agreed to collaborate with Roche on a research program to identify, develop and commercialize novel second-generation HCV protease inhibitors. Assuming that we continue to successfully develop and commercialize these product candidates, under the terms of the Collaboration Agreement we are entitled to receive reimbursement and sharing of expenses incurred in connection with the development of these product candidates and additional milestone payments from Roche. As a result, Roche is providing 67% of the development costs for RG7227. In addition, if any of the product candidates we have licensed to Roche are approved for commercialization, we anticipate receiving proceeds in connection with the sales of such products. Roche may terminate the Collaboration Agreement in its entirety, in any country, subject to certain limitations for major countries, or with respect to any product or product candidate licensed under the Collaboration Agreement for any reason on six months’ written notice. If the Collaboration Agreement is terminated in whole or in part and we are unable to enter into similar arrangements with other collaborators, our business could be materially adversely affected.

[bxjwn9ru]

My understanding, based on prior discussions with Dew, is that Roche had an HCV exclusivity deal with ITMN and therefore could not just walk away from the partnership with ITMN if Roche ever wanted to license an outside HCV compound. I.e., Roche had to pay ITMN to terminate its HCV exclusivity deal with ITMN in order to have the freedom to license an HCV compound from another company.

Maybe ACH-1625 is on Roches radar. You never know. :)