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Auxilium Pharmaceuticals, a Pennsylvania specialty pharmaceutical company, has retained Merrill Lynch to find a partner for the European rights to Xiaflex in Dupuytren’s contracture, CFO James Fickenscher told Pharmawire.
”That process is underway right now,” he said, but would not disclose a definite partnership timetable.
Xiaflex is an injectable collagenase enzyme for the treatment for the hand condition known as Dupuytren’s contracture. The disease starts with a painful nodule that ultimately develops into a formation of a cord of collagen deposits. The injection is meant to be given directly into the Dupuytren’s cord.
The company is currently running a Phase III, double-blind, placebo-controlled study in the US with patients that have Dupuytren’s contracture in a metacarpophalangeal joint or a Proximal interphalangeal joint. The company has dosed over 1,000 with Xiaflex and expects to report top-line results from the double-blind portion of the CORD I and II trials in Dupuytren’s contracture in June.
However, two industry bankers believed that the company could be vying for a takeout, and that Merrill Lynch could be exploring other opportunities, such as an outright sale.
One banker said the company is trying to find a partner, but is also hoping that these discussions will turn into an M&A transaction. ”They are still expecting Phase III data so you would need that data before anyone is going to do anything,” the banker said. A second banker concurred, noting that the company is probably seeking various ideas.
Regarding a takeout, Fickenscher said the Auxilium’s strategy is to build a sustainable long-term company. He added that a takeout is not the company’s focus.
Offers could be derived from large pharma, specialty pharma, or those companies involved in orthopedic surgery or plastic surgery, the first banker said.
Leland Gershell, an analyst at Cowen & Company, agreed that multiple surgical device companies could be interested in Auxilium, since Xiaflex would be marketed as an alternative therapy to surgery. He named Sryker and Zimmer as examples, but noted that he was not highlighting any one company in particular.
Fickenscher has previously said that Auxilium plans to market Xiaflex in Dupuytren’s contracture primarily to orthopedic surgeons.
Genzyme, which has a biosurgery division, as well as Johnson & Johnson could be potential European partners, Gershell added.
The first banker did question, however, the viability of Auxilium’s market opportunity for Xiaflex. ”Do people really need to use this procedure? Is this something that people can manage without any surgical procedures?” he asked rhetorically.
A second industry analyst agreed that a partnership deal is more likely than a takeout. He added that a European partner will likely have an interest in urology or hormones, and could include the likes of GlaxoSmithKline, AstraZeneca, Sanofi-Aventis and Novartis.
”I don’t see a merger, I see more chance of a licensing,” he said. ”If they have the goods, they will get taken up, but they may be a one hit wonder. I don’t think they have enough in the pipeline at this valuation to get anybody super excited.”
Gershell disagreed. He noted that the company is currently trading at a discount, given the number of other indications that Xiaflex could treat, including Peyronie’s Disease, in which a collagen shaft distorts the penis, and potentially even cellulite, a mass market, cosmetic indication.
The other alternative to Xiaflex in Dupuytren’s is a less invasive procedure called needle aponeurotomy, where a small hypodermic needle is used to divide and sever the cords in the diseased areas of the palm and fingers.
Some surgeons prefer not to use needle aponeurotomy because of a potential risk of nerve damage. For milder cases, surgeons recommend steroids or even exercise, Fickenscher previously told this news service.
As previously reported, geography is likely to play a large role in the sales of Xiaflex, given its genetic link to people of Northern European descent.
Dr John Mahoney, a hand surgeon at the Midwest Orthopaedic Center in Illinois, had told this news service in December that most Dupuytren’s patients do not need surgical treatment. He added that he and his partner collectively saw 20 to 30 patients per year whose disease was serious enough to warrant some physical intervention. ”It’s so hard to know,” he said at the time.
The company has a USD 1.25bn market cap.
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