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UCB to Return Tozadenant Rights

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UCB (UCBJF - Free Report) has several late stage candidates including romosozumab in osteoporosis in post-menopausal women, brivaracetam as adjunctive therapy for the treatment of partial onset seizures in adults with epilepsy, and epratuzumab in systemic lupus erythematosus (SLE).

Vimpat (marketed product) as monotherapy was submitted as part of the supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA), which was accepted in Oct 2013. Vimpat is also being studied for monotherapy in the EU. Vimpat is also under a phase III study for adjunctive epilepsy in children. The initial results will be out in 2017.

Recently, UCB announced that it will return global rights to tozadenant (SYN115) to Biotie Therapies Corp.

Tozadenant is an orally administered, selective inhibitor of the adenosine 2a receptor, which is being developed for the treatment of Parkinson’s disease.

The decision to return the rights emerged from the company’s assessment of its early and late stage pipeline and also its preclinical opportunities. However, it does not in any way reflect concerns regarding the safety or efficacy of tozadenant. As a result of this decision, UCB will write-off a non-recurring, one-time item of intangible assets and costs amounting to roughly €40 million.

We note that in Feb 2013, UCB had in-licensed exclusive global rights to tozadenant for Parkinson’s disease from Biotie Therapies. UCB and Biotie had initially announced their collaboration in 2010. UCB’s decision to in-license the candidate was based on encouraging results from a phase IIb study that evaluated tozadenant as an adjunctive therapy in levodopa-treated Parkinson's disease patients. The phase III program was to be conducted by Biotie in return for milestone payments from UCB.

As earlier planned, the end-of-phase II meeting with the U.S. Food and Drug Administration (FDA) will take place in the first half of 2014. The phase III study is scheduled to start in 2015. UCB will continue working with Biotie to make the candidate ready for phase III development.

UCB carries a Zacks Rank #4 (Sell). Considering UCB’s priorities, it was a good decision from the company.

Investors looking for better-ranked stocks in the biopharma sector may consider companies like Questcor Pharmaceuticals, Inc. , Shire (SHPG - Free Report) and Alkermes (ALKS - Free Report) , all of which carry a Zacks Rank #1 (Strong Buy).

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