Kowa Pharmaceuticals America, Inc., a U.S. subsidiary of Kowa Company Ltd has entered into an exclusive license agreement with CymaBay Therapeutics Inc (NASDAQ:CBAY). The agreement will facilitate the late stage clinical development and commercialization of arhalofenate a compound used for the treatment of gout in the United States. The requisites of the agreement dictate that CymaBay will receive up to $15 million in upfront and thereafter near-term milestone payments. It will also have the eligibility of receiving up to an additional $190 million in payments but on achieving specific development, regulatory and sales milestones.
On the other hand, Kowa, which is a privately held, multinational company based in Japan will be accountable for all development and commercialization costs. Given that the company has previously been involved in a number of manufacturing and trading activities it is expected that will also deliver on this effectively. Besides it has been into various fields both pharmaceutical and non-pharmaceutical.
A partner to complete the Phase 3 development and commercialization of arhalofenate
It has taken CymaBay real focus in the identification of a partner who can walk the talk of the development and commercialization of arhalofenate. In appreciation of the company’s efforts, President and CEO of CymaBay notes, “We are extremely pleased to enter into this agreement with Kowa to develop and market arhalofenate in the U.S. Kowa has proven development capabilities as well as the resources to carry out a large Phase 3 development program. They also have an established primary care sales force to market arhalofenate products.”
Ben Stakely, Chief Executive Officer and President of Kowa Pharmaceuticals explained that approximately 8.3 million Americans suffer from gout. Hence the duo’s collaboration is significant in that it will help in making Arhalofenate largely available. Arhalofenate has already shown promising results in its early stage trials and the more reason the two are seeking to advance the clinical program that will demonstrate its efficacy.
Arhalofenate is being developed as a combination product with febuxostat
Having come to an end of its Phase 2 discussions with the FDA, CymaBay says that it is ready to move to an agreement on a Phase 3 program. This is expected to give Arhalofenate an upper hand and provide it with a completive label. In any case, it has been shown to suppress gout flares, a common inflammatory arthritis among men that results from the deposition of sharp, uric acid crystals in joints.
Meanwhile, CymaBay closed at $2.30 witnessing an increase of $0.40 or 21.05%.