Abstract
Lasofoxifene [CP 336156] is a potent, nonsteroidal, tissue-selective estrogen receptor modulator (SERM). It has the bone-sparing and cardioprotective effects of estrogen, but lacks estrogen's uterine cancer risk. Lasofoxifene is under development with Ligand Pharmaceuticals and Pfizer (formerly Parke-Davis) for the prevention of postmenopausal osteoporosis and breast cancer. In June 2000, Parke-Davis' parent company, Warner-Lambert, merged with Pfizer. The resulting company retained the Pfizer name and Parke-Davis was integrated into Pfizer Global Research and Development. The discovery of lasofoxifene resulted from a research collaboration between Pfizer and Ligand Pharmaceuticals. There was a contract dispute between the two companies relating to their research agreement. Under a settlement of litigation, Ligand is entitled to milestone and royalty payments. If Pfizer is successful in developing the drug through to regulatory approval in the US, Ligand could receive royalty revenues from lasofoxifene as early as 2003-2004. The royalties will be equal to 6% of net sales and will be in addition to milestone payments for continuing development of the drug. However, on 6 March 2002, Ligand Pharmaceutical announced an agreement with Royalty Pharma in which the latter purchased the rights to a share of these future payments. Under the agreement, Ligand received US dollars 6 million from Royalty Pharma in exchange for a 0.25% stake in net sales of three SERM products (lasofoxifene, bazedoxifene and bazedoxifene/Premarin) for a period of 10 years. Royalty Pharma retains the option to purchase, at escalating prices, additional rights (subject to timing restrictions) to extend this stake up to 1.0%, for a total of US dollars 56 million. In April 2002, Royalty Pharma exercised its first option to purchase an additional 0.125% of potential future sales of the three SERMS in exchange for US dollars 3 million. Subsequently, in December 2002, Royalty Pharma exercised an expanded option and agreed to pay Ligand US dollars 6.775 million for 0.1875% of potential future sales of SERM products. Royalty Pharma and Ligand Pharmaceutical amended their royalty agreement in October 2003 for the three SERM products. Under the amended agreement, Royalty Pharma exercised an option to pay Ligand US dollars 12.5 million, plus cumulative milestones of up to US dollars 2.5 million upon the launches of the three SERMs (provided they are approved by 30 September 2005), in exchange for 0.7% of potential future sales of the products for 10 years. In November 2004, Ligand Pharmaceuticals and Royalty Pharma further amended their existing royalty agreement for the three SERM products. Under the terms of the revised agreement, Royalty Pharma will purchase an additional 1.625% of the SERM products' net sales for US dollars 32.5 million, which represents an acceleration of the previous option timetable and an increase in the royalty amount as well as aggregate purchase price. Consequently, Royalty Pharma increased its rights to a total of 3.0125% of net sales of each SERM product for 10 years following the first commercial sale of each product and has no further options. Ligand retains an approximately equal portion of lasofoxifene and other SERM's net sales going forward and for periods that could exceed 10 years. The royalty rates owed to Royalty Pharma for the royalties just purchased could be reduced by one-third if product sales exceed certain thresholds. Payments from the royalty purchase are non-refundable, regardless of whether the products ever become successfully launched or not. Milestone payments owed by Ligand's partners as products achieve development and regulatory targets will be paid to Ligand as earned and are not included in this amended agreement. In September 2004, Ligand Pharmaceuticals earned a milestone payment of approximately US dollars 2 million from Pfizer, payable in 181,818 shares of Ligand stock held by Pfizer. The payment was triggered by Pfizer's NDA submission for lasofoxifene in August 2004. Under the terms of the agreement between Ligand and Pfizer, Ligand is entitled to receive an additional milestone upon successful approval of lasofoxifene. On 19 August 2004, Pfizer filed an NDA with the US FDA for lasofoxifene for the prevention of osteoporosis in postmenopausal women. Product launch is forecasted to occur in 2006-2007. Ligand reported in January 2004 at the 22nd Annual JP Morgan Healthcare Conference that it anticipated the availability of phase III data and NDA filing sometime in 2004. Lasofoxifene has undergone two phase III studies with Pfizer in the US as an orally administered therapy for postmenopausal osteoporosis. In June 2003, Pfizer reported that enrolment was completed in a trial evaluating lasofoxifene in the prevention of bone loss. The trial also evaluated lasofoxifene's effect on lipid levels. The trial enrolled approximately 2000 postmenopausal women. Another trial was conducted among 8500 patients to investigate lasofoxifene in the treatment of fractures. In addition, Pfizer began a third worldwide phase III trial to evaluate whether lasofoxifene reduced the risk of vertebral fractures, breast cancer and cardiovascular disease. At the 10th Annual Meeting of the Biotechnology Industry Organization (BIO-2003), Ligand also confirmed that lasofoxifene was in phase III development for breast cancer. Lasofoxifene is under clinical evaluation as a treatment for vaginal atrophy. According to Pfizer's pipeline in November 2004, the company anticipates regulatory submission for vaginal atrophy by the end of 2004. In June 2002, Ligand estimated that lasofoxifene has the potential to reach sales of US dollars 1-2 billion, pending approval.
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