GlaxoSmithKline And Tolerx Form Worldwide Collaboration For Development And Commercialization Of TRX4

Source: Tolerx
Date: Oct 25, 2007

Collaboration Focuses on Type 1 Diabetes and Other Autoimmune Indications

London, UK and Cambridge, MA - October 23, 2007 - GlaxoSmithKline and Tolerx, Inc. today announced the execution of a worldwide alliance to develop and commercialize otelixizumab (TRX4), a novel humanized anti-CD3 monoclonal antibody that has potential across a broad range of autoimmune and immune-mediated inflammatory diseases, including type 1 diabetes.   Otelixizumab has been evaluated in type 1 diabetes in two Phase II studies and in psoriasis in two Phase I studies.  In clinical trials, otelixizumab has been shown to preserve the function of insulin-producing beta cells in the pancreas in patients with type 1 diabetes, reducing the amount of administered insulin needed to control blood glucose levels.
                 
Under the terms of the agreement, Tolerx will have responsibility for the Phase III clinical program for type 1 diabetes in the US up to and including regulatory submission of the biologics license application (BLA).   Tolerx has the option to co-promote otelixizumab in type 1 diabetes in the US with GSK, while GSK will have exclusive rights to develop and commercialize otelixizumab in all other indications in the rest of the world.  GSK also has the exclusive right to develop the pediatric indication for type 1 diabetes in the US.

As part of the collaboration, Tolerx will receive an upfront payment, equity and advance R&D funding totaling $70 million.  In addition, Tolerx may receive up to $155 million in future development costs of otelixizumab in type 1 diabetes.  Tolerx may earn up to $350 million in milestone payments, assuming successful development and approvals of otelixizumab for type 1 diabetes and multiple additional indications.  Tolerx may also receive up to $175 million in sales milestone payments based on tiered net sales thresholds of otelixizumab. Tolerx will be entitled to receive tiered, double-digit royalty payments on worldwide sales of otelixizumab in all indications. At the time of an initial public offering of Tolerx’s common stock and at the request of Tolerx and certain other conditions, GSK will invest up to an additional $10 million in Tolerx’s common stock.

Dr. Moncef Slaoui, Chairman of Research and Development at GSK, commented, “Otelixizumab is another welcome addition to GSK’s rapidly expanding biopharmaceuticals pipeline. This is a key area of future growth and investment for GSK and, as a novel treatment for many T cell-mediated diseases, the potential of otelixizumab is significant. Together with Tolerx, who are pioneers in this area of science, we hope to realize the potential of this compound and bring a valuable new treatment option to patients suffering from type 1 diabetes and other autoimmune disorders.”

About Type 1 Diabetes
Diabetes (medically known as diabetes mellitus) is the name given to disorders in which the body has difficulty regulating its blood glucose, or blood sugar, levels. There are two major types of diabetes:  type 1 and type 2.  Type 1, also called juvenile diabetes or insulin-dependent diabetes, is a disorder of the body's immune system.  In type 1 diabetes, the pancreas produces little or no insulin as a result of the immune system attacking and destroying the insulin-producing beta cells in the pancreas.  Therefore, type 1 diabetes patients require frequent administration of insulin therapy each day to control their blood sugar levels.  

About Otelixizumab
Otelixizumab is a monoclonal antibody that binds to a receptor component found on all T cells known as CD3, which is involved in normal T cell signaling. Otelixizumab is designed to block the function of autoreactive T-effector cells that attack the body’s tissues and cause autoimmune disease while inducing a subset of T cells called T-regulatory cells that are thought to protect against T-effector cell damage well after the drug has been eliminated from the body.  In a Phase II clinical study of subjects with new-onset type 1 diabetes, otelixizumab demonstrated the potential to preserve the function of insulin-producing beta cells in the pancreas and reduce the amount of administered insulin needed to control blood glucose levels for up to 18 months after only a single six day course of therapy.  In the study, residual beta cell function was assessed by measuring glucose clamp-induced C-peptide release before and after the administration of glucagon.  Otelixizumab administration was associated with transient symptoms of flu-like syndrome and transient Epstein-Barr Virus (EBV) reactivation. Tolerx has completed dose optimization studies in subjects with type 1 diabetes and psoriasis and has identified a dosing regimen that thus far has significantly reduced or eliminated these side effects while maintaining important biological activity.