Flamel shares surge on BMS deal

French company Flamel Technologies has added another high-profile client for its drug delivery technology, spurring another leap in its shares that have already climbed almost 800 per cent over the last 12 months.

Bristol-Myers Squibb​ is the latest company to be convinced by Flamel's drug delivery technology, paying $165 million for rights to Basulin, a once-daily injectable formulation of insulin that is just about to enter Phase III testing.

Flamel's US-listed shares were up 27 per cent to $26.95 on the day of the announcement, as it emerged that BMS would pay $20 million in upfront fees for the license, as well as assume all development and commercialisation activities for the drug. Flamel​ stands to receive up to $145 million in milestone payments and a double-digit royalty on sales should Basulin reach the market.

Importantly, BMS is one of the first major partners for Flamel's Medusa nanoparticulate technology, used to improve the delivery of therapeutic proteins. The French company also has a number of projects based on its oral Micropump delivery technology with the likes of GlaxoSmithKline and Servier, but it has been keen to raise the profile of Medusa of late, given the number of protein-based therapeutics coming through clinical trials.

Basulin was formerly partnered with Novo Nordisk, but the latter company pulled out of the collaboration in 2002. The drug is a once-daily version of recombinant human insulin and, as such, is differentiated in the marketplace from once-daily insulin analogues and human insulin requiring multiple injections each day.

Flamel and BMS hope that using human insulin may reduce the risk of side effects caused by immunological responses and extend insulin delivery to include full 24-hour cover.

BMS has an established franchise in diabetes, with oral antidiabetic drugs including Glucophage XR (metformin), Glucovance (glyburide/metformin) and Metaglip (glipizide/metformin), but Basulin will mark its first entry into the insulin market, currently dominated by Eli Lilly and Novo Nordisk.

Meanwhile, BMS is in need of filling some of the gaps in its late-stage pipeline, having experienced some major product disappointments in recent years, such as the late-stage failure of Vanlev (omapatrilat) for hypertension and heart failure and colorectal cancer treatment Erbitux (cetuximab; although the latter may be re-filed later this year).

And press reports today suggest that BMS may withdraw its big-selling antidepressant Serzone (nefazodone) from the Canadian market over fears of liver toxicity. It has already been pulled in Europe, but remains on sale in the US, Canada and Australia.