Roche Holdings Ltd. (RHHBY) recently announced that it has entered into a worldwide agreement with Evotec AG (EVTCY) for the development and commercialization of the latter’s candidate EVT 302, which is being studied for the treatment of Alzheimer’s disease (AD).
According to the agreement, Roche will make an upfront payment of $10 million to Evotec. Additionally, Evotec is entitled to receive development and commercial milestone payments of up to $820 million as well as tiered double-digit royalties on the sales of the drug.
Under the agreement, Roche will be responsible for all clinical development, manufacturing and commercialization activities of the candidate. The company plans to initiate proof of concept studies of EVT 302 in 2012.
Recently, Roche received a boost with the European Commission (EC) approving Tarceva (erlotinib) for first-line use in patients with a genetically distinct type of advanced non-small cell lung cancer (NSCLC). The drug is already marketed as a treatment for advanced lung cancer after platinum-based chemotherapy.
Roche is also in talks with the US Food and Drug Administration (FDA) to gain approval to use Tarceva as a first-line treatment in people with advanced EGFR (epidermal growth factor receptor) activating mutation-positive NSCLC. Moreover, the company is in talks to gain approval for the use of a companion diagnostic test to help identify patients with activating EGFR mutations, who are appropriate candidates for Tarceva.
While Roche holds rights to market Tarceva in the US and the European Union (EU), it has a global development and marketing alliance with Astellas Pharma for the drug, whereby Astellas and Roche evenly split the sales effort for marketing the drug.
We currently have a Zacks #2 Rank (short-term Buy rating) on Roche.