TEL AVIV, June 14 (Reuters) - Israel's Teva Pharmaceutical Industries (NasdaqNM:TEVA - News; Tel Aviv:TEVA.TA - News) joined the race to develop a pill for multiple sclerosis on Monday by licensing rights to an experimental drug from Sweden's Active Biotech AB (Stockholm:ACTI.ST - News).
Existing multiple sclerosis (MS) treatments, including interferons amd Teva's Copaxone, must be given as injections.
Industry analysts said Teva would be competing with Swiss biotechnology group Serono (SEO.VX) in developing Active Biotech's compound laquinimod.
"This puts Teva neck and neck with Serono in the race to bring the first oral therapy to market in MS. We expect Teva to start Phase III (trials) in the next 6-12 months while Serono's oral cladribine is due to enter efficacy studies this year," said Sam Williams of Lehman Brothers.
Active's shares jumped eight percent by mid-morning in Stockholm, while Teva was 0.2 percent higher in Tel Aviv.
Under the terms of the agreement, Teva will acquire the exclusive rights to develop, register, manufacture and commercialise laquinimod worldwide, with the exception of the Nordic and Baltic countries, where Active Biotech will retain all commercial rights.
Teva will make an upfront payment of $5 million to Active Biotech and will fund further clinical development. The contract also calls for Teva to make payments to Active Biotech upon the achievement of various milestones, which include sales targets.
If the milestones are all met, payments to Active Biotech would total $92 million.
Active Biotech has completed a mid-stage Phase II trial and presented its results at the 2004 American Academy of Neurology Annual Meeting in San Francisco in April.
The results showed that oral laquinimod, in a dosage of 0.3 mg daily, was well tolerated and effective in suppressing the development of active lesions in relapsing MS. Teva intends to complete the clinical development programme and will conduct Phase III studies.
Teva, the world's leading generic drug company, is already an important player in the MS market with Copaxone, which has a more than 29 percent share in the United States and is marketed in partnership with Aventis (Paris:AVEP.PA - News). (Additional reporting by Ben Hirschler in London)