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| LJPC > SEC Filings for LJPC > Form 8-K on 6-Jan-2009 | All Recent SEC Filings |
6-Jan-2009
Entry into a Material Definitive Agreement
If the DMB indicates after the first or second interim efficacy analyses that
the ASPEN study no longer has meaningful potential to meet its primary endpoint
with statistical significance, or the nominal p-value for the primary end point
is not achieved following the end of the ASPEN study, then the Company and
BioMarin CF may agree to certain limitations on the development costs to be
shared prior to FDA approval and BioMarin CF may delay its decision to
participate fully until the receipt of FDA approval. Under this scenario, an
additional payment of $55 million (up to $15 million of which may be used to
purchase additional Series B Preferred Stock) will be due to the Company
following FDA approval in order for BioMarin CF to participate fully and
exercise all of its rights and license to develop and commercialize Riquent in
the Territory.
The Company will also be eligible to receive additional payments of up to
$181 million based on the receipt of regulatory approvals and the achievement of
certain commercial milestones. Furthermore, upon commercialization of Riquent,
if approved by the FDA, the Company will receive 50% of the net profits
generated from sales of Riquent in the Territory.
The Company retains all rights to develop and commercialize Riquent in the
Asia-Pacific Territory. In addition, in the event the Company wishes to enter
into a license agreement with a third party with respect to Riquent for a
country within the Asia-Pacific Territory, the Development Agreement provides
BioMarin CF with a right to match such third party's offer.
Under the Development Agreement, the Company retains the right to manufacture
Riquent for use in the Territory, subject to certain conditions and limitations
relating to quantity and price. If the Company does not retain rights to
manufacture Riquent for the Territory, BioMarin CF will have the right to
manufacture Riquent for the use or sale of Riquent in the Territory. BioMarin CF
and the Company will also work collaboratively to maximize supply chain and
process efficiencies.
In addition, under the Development Agreement, the Company retains responsibility
for completion of the ongoing Phase 3 clinical trial for Riquent as well as for
planning and implementing a planned dosing study. The Company will also remain
responsible for preparing and filing a New Drug Application for Riquent in the
United States, and BioMarin CF will assume all regulatory responsibilities for
Riquent if such New Drug Application is approved. If approved, the Company and
BioMarin CF will jointly commercialize Riquent in the United States and the
Company has the right to deploy up to approximately half of the total sales and
marketing headcount for Riquent in the United States. In other countries of the
Territory, BioMarin CF will be exclusively responsible for the commercialization
of Riquent. A joint steering committee will be formed to oversee, review and
coordinate the activities of the Company and BioMarin CF under the Development
Agreement.
The Development Agreement terminates automatically if BioMarin CF does not make
the payments that are due upon the occurrence of certain clinical development
milestones prior to BioMarin CF deciding to participate fully, or if BioMarin CF
does not decide to participate fully pursuant to the terms set forth in the
Development Agreement. BioMarin CF has the right to terminate the Development
Agreement for convenience upon 180 days' prior written notice to
the Company and, prior to deciding to participate fully, BioMarin CF has the
right to terminate the Development Agreement upon thirty days' written notice to
the Company.
If the Development Agreement is terminated due to breach, including the
occurrence of certain events related to the other party's financial distress,
the party who terminated the agreement has the right to purchase the other
party's interests in Riquent in the Territory in return for the payment of
either (i) a reasonable royalty, subject to certain limitations; or (ii) a lump
sum payment equal to eighty percent (80%) of the fair value of the rights,
provided that BioMarin CF shall only have this right if the Company's
stockholders approve this term. If BioMarin CF terminates the Development
Agreement due to the Company's breach and the Company has not obtained
stockholder approval for the BioMarin CF purchase right, then BioMarin CF has
the right to require the Company to purchase all of BioMarin CF's interest in
Riquent in the Territory for an amount equal to the higher of (i) the fair value
of the rights, or (ii) three times all payments (other than equity purchases)
made by BioMarin CF to the Company under the Development Agreement.
In connection with the Development Agreement, the Company also entered into a
securities purchase agreement, dated as of January 4, 2009 (the "Purchase
Agreement") with BioMarin Pharma. The Purchase Agreement provides that the
Company will issue to BioMarin Pharma 3,391,035 shares of Series B Preferred
Stock at a price per share of $2.21171 and may, as described below, issue
additional shares of Series B Preferred Stock in consideration of certain
milestone payments due under the Development Agreement. The sale of the shares
is expected to close on January 20, 2009. The Series B Preferred Stock is
non-voting, has a liquidation preference that is senior to the Company's common
stock and is convertible into common stock at a rate of three to one (i.e.,
three shares of common stock for every one Series B Share).
Further, the Company may be required to issue additional shares of Series B
Preferred Stock to BioMarin CF in exchange for up to $20 million of contingent
milestone payments described above. If issued, the Series B Preferred Stock will
be issued at a price per common share equivalent equal to the greater of (a) one
hundred ten percent (110%) of the average closing price of the Company's common
stock over a 10-day day period prior to the Company's public announcement of the
event triggering the milestone payment or (b) $0.73724 per common equivalent
share.
Finally, under the Purchase Agreement, BioMarin Pharma has a limited preemptive
right to participate in future sales or issuances of common stock, or other
securities or rights convertible into common stock, by the Company, subject to
certain exceptions.
Item 8.01. Other Events.
About La Jolla Pharmaceutical Company and Riquent.
We are a biopharmaceutical company dedicated to improving and preserving human
life by developing innovative pharmaceutical products. Our leading product in
development, Riquent, is designed to treat lupus renal (kidney) disease by
preventing or delaying renal flares. Lupus renal disease is a life-threatening,
antibody-mediated disease in which disease-causing antibodies damage the
kidneys. Renal flares are periods of extreme, acute kidney inflammation in
patients
suffering from lupus renal disease. Riquent is currently in a Phase 3 clinical
trial under a Special Protocol Assessment and has been granted Fast Track
designation by the FDA. This study is an event-driven trial requiring us to
accrue a specified number of renal flares to complete the study.
Lupus renal disease is a chronic illness that can lead to irreversible renal
damage, renal failure and the need for dialysis, and is a leading cause of death
in lupus patients. Lupus is an antibody-mediated disease caused by
autoantibodies, of which antibodies to double-stranded DNA ("dsDNA") are an
important subgroup. Riquent is designed to prevent or delay renal flares by
lowering the levels of circulating antibodies to dsDNA, which are believed to
cause lupus renal disease. Current treatments for this autoimmune disorder often
address only symptoms of the disease, or nonspecifically suppress the entire
immune system, which can result in severe, negative side effects and
hospitalization. We believe that Riquent has the potential to treat lupus renal
disease without these severe, negative side effects. We believe that 40% to 45%
of lupus patients will develop renal disease.
In 2008, we announced positive 12-month interim antibody data from our ongoing
double-blind, placebo-controlled, randomized Phase 3 study of Riquent referred
to as the "Phase 3 ASPEN study" (Abetimus Sodium in Patients with a History of
Lupus Nephritis). Analyses of 12-month interim antibody data in the first 125
patients randomized in the study indicate that for all patients treated with 900
mg, 300 mg or 100 mg of Riquent per week compared with placebo, there were
significantly greater reductions in antibodies to dsDNA (p < 0.0001).
The data show a dose-response curve for antibody reduction and also show that
the 300 mg and 900 mg doses appear to be near the top of the antibody-related
dose-response curve, thus supporting the choice of doses for this study.
Antibody levels in the placebo-treated group remained around baseline levels
throughout the 12 months. The rate at which antibody levels were maximally
reduced appeared to be more rapid in the 900 mg dose group than in the 300 mg or
the 100 mg dose groups. Each individual dose group was significantly different
from placebo (p < 0.0001). An area under the curve ("AUC") analysis, which
reflects the effect of the drug on antibody levels over time, showed
significantly greater antibody-lowering effects for the 300 mg and 900 mg dose
groups compared with the placebo group (decreases of 26.9% for 100 mg, 35.5% for
300 mg and 37.7% for 900 mg, compared with an increase of 7.5% for placebo). The
AUC analysis provides additional evidence that the higher doses of Riquent
suppressed antibodies further than the 100 mg dose group. The proportion of
patients achieving a 50% or greater AUC reduction was 0.0% in the placebo and
100 mg groups, 23% in the 300 mg group, and 30% in the 900 mg group. Antibody
levels were measured every two weeks for the first 16 weeks of the study and
then monthly for the remaining 36 weeks. All demographics and baseline
characteristics were comparable across dosing groups.
As of January 1, 2009, more than 170 clinical trial sites were active and more
than 900 patients have been enrolled in the ASPEN trial. The DMB has completed
four reviews of the safety data and has not indicated any safety issues. The
study is an event-driven trial designed to be completed when 128 renal flares
have occurred. The current overall renal flare rate is lower than the original
trial assumption. As a result, in an effort to shorten the time to achieve the
required number of renal flares, we have extended the treatment period beyond
12 months and continue to
enroll patients beyond the initially targeted 740 patients. Based on these
changes, we expect the trial to complete in the second half of 2009.
In early November 2008, we voluntarily temporarily suspended the dosing of
patients in the ASPEN trial as a precautionary measure due to the discovery of
minute particulates in certain vials used in the trial. The particulates were
the result of vial delamination occurring in certain vials, containing either
drug or placebo, used in the trial. We promptly reported the finding to the FDA
and investigated the matter. After the quality of the drug and placebo was
assured and, following discussions with the FDA and clinical investigators,
dosing was resumed, with the allowance of the use of syringe filters for
administering the placebo and Riquent as an added assurance of patient safety.
Multiple sites in several countries resumed dosing of patients approximately two
and a half weeks later and, as of the date of this filing, approximately 88% of
patients currently enrolled and who were being treated when this issue first
arose have been re-dosed. Any patients who do not resume dosing before having
missed nine doses will be replaced. We do not believe that this delamination
issue has, to date, adversely affected, or will in the future adversely affect,
the timing or cost to complete the ASPEN trial, nor is it expected to affect the
outcome of the trial.
During the temporary dosing interruption, patients continued with their
protocol-defined physician visits. This temporary interruption of dosing was
discussed with the FDA and is not expected to either result in any impediment to
FDA approval or have any negative impact on the integrity of the study.
The Phase 3 ASPEN study also includes two interim efficacy analyses, each with
target p values of p < 0.001 and a final p value of p < 0.05 at the end of the
study. We have added a futility analysis to each interim efficacy analysis. The
first interim efficacy analysis is expected to occur in early 2009, and the
second interim efficacy analysis is expected to occur approximately midway
between the first analysis and the expected end of the study.
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