Acucela, Otsuka to co-develop two compounds with ophthalmic indications

BOTHELL, Wash. — Acucela and Otsuka Pharmaceutical have entered into a definitive agreement to co-develop two compounds with ophthalmic indications, the companies announced in two joint press releases.

Under the agreement, the companies will co-develop ACU-4429, Acucela's lead compound for treating dry age-related macular degeneration, and rebamipide ophthalmic suspension, Otsuka's proprietary compound for treating dry eye.

Upon commercialization of ACU-4429, the companies expect to co-promote the drug for dry AMD, as well as for other potential indications, in North America and to share an equal stake in expenses and profits from all North American product sales. Acucela will retain all rights to ACU-4429 in Europe, while Otsuka will have exclusive development and commercialization rights in Asia and specific global markets, the release said.

Also under the agreement, Otsuka will pay Acucela a $5 million initial cash payment, as well as potential milestone payments totaling $258 million. Otsuka will finance all clinical development through phase 2 testing. Upon the initiation of phase 3 testing, both companies will share an equal stake in all future clinical development expenses. Otsuka will supply Acucela with a loan facility to fund its share of the development expenses through the North American launch of the product.

Regarding rebamipide, Acucela will seek regulatory approval for the drug in the United States. Once approved, the companies plan to negotiate terms under which they will co-promote rebamipide in the United States. Otsuka will tender Acucela an initial cash payment as well as clinical development milestones and royalties on all product sales. In addition, Otsuka will fund all clinical development and commercialization expenses.

ACU-4429 is currently in phase 1 clinical development and rebamipide is currently in phase 3 development in the United States, according to the releases.