Teva Acquires Rights to New Huntington's Disease Drug

Potential treatment has no side effects, expands company's portfolio of drugs for diseases of the central nervous system.

Teva Pharmaceutical Industries has acquired the rights to a brand drug for the treatment of the symptoms of Huntington's disease, a hereditary neurodegenerative illness.

On Thursday, the Israeli company announced an asset transfer agreement with the Danish company NeuroSearch, covering all the rights to Huntexil, which is being developed to alleviate hand-movement, balance and gait impairment, without the side effects, such as sedation and depression, common to other drugs. Teva agreed to pay $26 million over six months, the company said, plus additional sums based on milestones. The additional amounts could add as much as $9.5 million to the price tag for the drug.

Huntington's disease is fatal. It usually manifests in middle age, but can appear at any time of life. It is characterized by uncoordinated and uncontrollable movements, cognitive deterioration, and mental problems. In its later stages, the disease causes memory loss, dementia, speech problems and deepening depression. Death generally occurs within 15 to 25 years of diagnosis, usually from pneumonia, a fall or malnutrition.

"Previous trials in the U.S., European Union and Canada demonstrated significant symptomatic relief for patients with [Huntington's disease]," Teva said in a statement released on Thursday, "including improved hand movements and improved gait and balance." The company said the results were observed "without any side effects such as sedation and depression seen with other therapies," adding that the company believes the drug will make a "real difference" in patients' quality of life.

The company acknowledged, however, that data from the clinical studies were presented to the U.S. Food and Drug Administration and the FDA and European Medicines Agency, an agency of the European Union, in the first half of 2011, "but were found insufficient to file for marketing approval." The company says it intends to conduct new studies on the drug to access its ability to address Huntington's disease symptoms.

The condition that causes Huntington's disease is very different from that involved in Parkinson's disease, which Teva's durg Azilect is designed to treat. The company's purchase of the rights to Huntexil widens the company's portfolio of medicines that deal with diseases of the central nervous system, complementing Azilect and Copaxone, which is prescribed for multiple sclerosis, and creating marketing synergies.

Teva's acquisition spree has involved the investment of $22 billion over the past four years. The move has left it with net obligations of $12.8 billion and remaining questions as to what will replace its pharmaceutical cash cow, Copaxone, the patent rights to which expire in September 2015.

Jerusalem-based Teva's financial situation is expected to have an impact on its business development efforts, which in the next several years will center on joint business ventures and the acquisition of development and marketing rights to drugs in their initial stages of development. The coming years are expected to be marked less by blockbuster corporate acquisitions.

The business strategy behind the acquisition of Huntexil is similar to the type of acquisition Teva's CEO, Jeremy Levin, made while he was with the firm Bristol-Myers Squibb, including for example the purchase of a company, Medarex, that was engaged in developing an antibody to treat a certain type of skin cancer at the same time that Pfizer pharmaceuticals was pursuing a similar effort. Pfizer dropped the project due to side effects caused by its drug, but Levin's firm persisted with Medarex's version and won U.S. Federal Drug Administration approval last year after it was demonstrated to prolong the lives of patients taking it.