Ergomed Wins Rare Profit-Sharing Deal in Phase III Contract with Aeterna Zentaris

10-Apr-2013 - Last updated on 11-Apr-2013 at 11:10 GMT

CRO Ergomed will pay part of the cost of a Phase III trial of Aeterna Zentaris’ candidate endometrial cancer treatment in exchange for a share of future profits.

The profit-sharing deal announced Wednesday is the fourth time Ergomed has established such an agreement, dating back to 2006, though none of the deals have resulted in profits for the CRO as yet, Neil Clark, CFO of Ergomed, told Outsourcing-Pharma.com. Three of four of the deals are still ongoing, he said.

Profit-sharing deals are not considered common by CROs and Clark noted that there will “probably be more failures than successes,” though the agreements can be profitable. Ergomed established a similar agreement in 2009 with Genzyme to develop a novel dolastatin analogue and Clark said the deal has “worked well.”

The agreement with Aeterna Zentaris requires Ergomed to pay 30 percent of the clinical and regulatory costs for the Phase III trial, up to $10M. Ergomed will receive an agreed single digit percentage of any net income received by Aeterna Zentaris for the treatment, known as AEZS-108, in this indication, up to a specified maximum amount. More financial details on the deal were not revealed.

“This agreement is part of our non-dilutive strategy aimed at minimizing R&D costs while maximizing drug development efficiency,” Juergen Engel, president and CEO of Aeterna Zentaris said. “Our goal for AEZS-108 with this collaboration, is to provide a much needed new treatment option to women with late-stage endometrial cancer.”

Clark said that the company believes in the compound and that the Phase II results were promising enough to pass the CRO’s R&D committee, which is responsible for choosing the deals in which the CRO will invest.

Ergomed is now “looking to do more profit-sharing agreements,” and is finding an increasing interest from pharma and biotech companies to share the risk of such late-stage trials, though it’s “not appropriate” for every biotech or pharma company, Clark said.

Push into Ukraine

Earlier this week, Ergomed announced the expansion of its clinical operations into Kiev, Ukraine, which adds to the company’s Russia operations in Moscow.

The CRO now has 15 offices in Europe, North America, Middle East and is currently conducting studies in 32 countries for a number of biotech and pharma companies.