Genentech to Develop Drugs With Inspire
Genentech Inc. on Tuesday said it had agreed to develop respiratory drugs with closely held Inspire Pharmaceuticals Inc., giving Genentech new early-stage product candidates.
South San Francisco-based Genentech, which is majority-owned by Swiss drug maker Roche Holding, said it could pay as much as $78 million in one-time payments to Inspire. Durham, N.C.-based Inspire would also receive royalties on sales of any drugs developed through the collaboration.
The pact gives Genentech rights to an experimental treatment for chronic bronchitis that’s about to enter the second of three stages of human trials required for U.S. approval. It also covers development of an earlier-stage treatment for cystic fibrosis.
If those drug candidates win approval, they could be marketed by the same sales force that Genentech uses to promote its cystic fibrosis drug Pulmozyme.
The agreement includes an initial payment to Inspire of $5 million in cash and $5 million in equity, Genentech said. The rest of the potential $78 million would be paid in the form of milestone payments if Inspire’s compounds meet certain goals.
Earlier this year, Genentech promised to intensify efforts to make acquisitions, in a bid to boost profit.
Genentech, considered the No. 2 biotechnology company behind Thousand Oaks-based Amgen Inc., has said it will use licensing agreements such as the one announced Tuesday, as well as outright acquisitions, to help increase its annual revenue to $5 billion by 2005, from $1.2 billion in 1998.
Genentech has more than $1 billion in cash that it has said it’s prepared to use for such deals. It could also use its own stock, the market value of which has more than doubled to about $32 billion since Roche sold Genentech shares to the public in July.
Shares of Genentech surged $8.75 to close at $132.75 on the New York Stock Exchange.
Inspire was founded with backing from several venture capital firms to commercialize research from the University of North Carolina at Chapel Hill School of Medicine.
