Zosano Pharma & Asahi Kasei Pharma Enter Agreement for Transdermal Patch for Up to $132.5 Million

Zosano Pharma, Inc. and Asahi Kasei Pharma Corporation (AKP) recently announced they have entered into a long-term strategic collaboration for the development, commercialization, and supply of a weekly transdermal patch formulation of Teribone (teriparatide acetate), AKP’s formulation of human parathyroid hormone (human PTH 1-34), for the treatment of osteoporosis patients with a high risk of fracture.

Under the terms of the agreement, AKP has received exclusive rights to develop and commercialize the transdermal patch formulation of Teribone in Japan, Korea, China, and Taiwan. AKP is responsible for clinical and regulatory development and commercialization activities. The transdermal patch product uses Zosano’s patented, clinically validated, and GMP-manufactured microprojection technology (known as ZP Patch Technology) to administer human PTH (1-34) through the skin. It is expected to offer the benefits of self-administration, weekly dosing, room temperature stability, and pain-free delivery without the need for an injection.

The agreement was signed on February 22, 2011, although AKP and Zosano agreed not to disclose the agreement until the subcutaneous injection form of Teribone for osteoporosis patients was approved in Japan, which occurred on September 26, 2011. With the development of a microprojection patch formulation of Teribone, AKP is further reinforcing both its R&D pipeline and its commitment to patients in the field of orthopedics, especially in the area of osteoporosis.

“AKP and Zosano have joined their world-class and complementary assets to create what we believe have the opportunity to be the best-in-class product for bone growth in severe osteoporosis patients,” said Gail Schulze, Chief Executive Officer of Zosano. “We believe this relationship will provide a product with superior fracture reduction and enhanced patient compliance compared to the currently available PTH injectables to those patients with a high degree of unmet need.”

As part of the agreement, AKP has paid Zosano $7.5 million in up-front consideration. In addition, AKP will pay over $25 million in milestone payments related to development, regulatory, and launch accomplishments. Zosano will receive revenue-based royalties based on sales of the microprojection patch formulation of Teribone in the Asian territories, as well as reimbursement for all development and manufacturing costs. AKP is committing significant additional financial and technical resources toward the development of the patch for the treatment of osteoporosis in the Asian territories, and expects to begin clinical trials in Japan in 2012. AKP and Zosano plan to continue discussions regarding the extent of their strategic collaboration, including potential joint development of the patch in other territories.

“Our partnership with Zosano reinforces AKP’s commitment to seek out innovative products that complement our existing portfolio in orthopedics and address significant unmet medical needs in Asia,” said Toshio Asano, President and Representative Director of AKP. “We look forward to expanding the potential for Teribone in this novel, transdermal form as a convenient treatment for patients suffering from osteoporosis in the Asian territories.”

Teribone is a human parathyroid hormone preparation that facilitates bone formation. A Phase III clinical trial in Japan demonstrated that, with weekly subcutaneous injections for 72 weeks, Teribone decreased the risk of developing new vertebral fracture by 78.6% compared to placebo treatment. The efficacy in inhibiting fracture is obtained by increasing bone strength with both improved bone quality and increased bone density. The subcutaneous injection form of Teribone for osteoporosis patients was approved in

Zosano’s ZP Patch Technology is based on microprojections that deliver therapeutic compounds (including peptides, proteins, small molecules, and vaccines) to the skin’s outer layer and provide rapid and efficient systemic drug delivery in a convenient, needle-free, and pain-free system. Zosano’s ZP Patch Technology is the most clinically validated microneedle technology in the world, having been tested in more than 450 patients with over 20,000 patches successfully applied to humans in Phase I and Phase II clinical studies.