Nastech Pharmaceutical Company Inc (BOTHELL, Washington) announced the amendment of its previous agreement with Procter & Gamble Pharmaceuticals, Inc (P&G) for the clinical development program of the parathyroid hormone (PTH1-34) nasal spray for the treatment of osteoporosis. The amendment includes an additional phase II dose ranging study as well as a change in the timing of payments. As newly amended, the agreement now stipulates that the $15 million in payments Nastech expected to receive in 2006 are deferred to a $5 million payment on the initiation (most likely in the second half of 2007) of the additional phase II clinical study and a $10 million payment on initiation of a phase III clinical study. Nastech still has the potential to receive up to $577 million in development and sales milestones, including $17 million that Nastech has received to date, depending upon the successful completion of specified development, regulatory, and commercialization goals and will receive double-digit, escalating royalties on product sales. P&G will also continue to reimburse Nastech for development activities performed by Nastech under the collaboration agreement wherein Nastech is responsible for the chemistry, manufacturing, and controls (CMC) sections of regulatory submissions and control of clinical and commercial manufacturing. P&G is responsible for clinical and nonclinical studies and regulatory approvals, and will lead worldwide commercialization, including sales, marketing, and promotion.

During 2006, P&G completed a pharmacokinetic study in postmenopausal women and elderly men. In that study, PTH1-34 nasal spray demonstrated a positive safety profile over a range of doses and produced similar exposure levels compared to the approved injected PTH1-34 (Forteo®, Eli Lilly and Co). Subsequently, P&G initiated a biomarker study in patients with low bone mass to measure blood markers of both bone formation and bone resorption. This study is expected to be completed during the second quarter of 2007.

PTH1-34 is a fragment of the naturally occurring human parathyroid hormone that is an important regulator of calcium and phosphorus metabolism. When given by daily injection, PTH1-34 has been shown to increase bone mineral density and significantly reduce both vertebral and nonvertebral fractures in postmenopausal women. Daily injections of PTH1-34 are approved for the treatment of postmenopausal osteoporosis and had $149 million in sales during the third quarter of 2006 (the 2005 annual sales for this product were $389 million). In February 2006, Nastech and P&G entered into a development and commercialization collaboration for PTH1-34 as an investigational nasal spray utilizing Nastech's proprietary tight junction modulation. The intranasal drug delivery technology can reversibly open "tight junctions" between cells, including the epithelial layer of the intranasal mucosa, and thereby allow therapeutic drugs to reach the blood stream. Nastech believes that their intranasal drug delivery technology could potentially offer advantages over injectable routes for the administration of large molecules such as peptides and proteins. These advantages may include improved safety and clinical efficacy and increased patient compliance due to the elimination of injection site pain and avoidance of injection site irritation. Studies will investigate whether the nasal spray formulation will produce the same results as daily subcutaneous injections.

Nastech and P&G currently plan to submit a Section 505(b)(2) application for the PTH1-34 intranasal spray. The 505(b)(2) pathway is a regulatory pathway for certain drugs that are already approved and on the market, but for which a change in dose, a change in indication, or a change in delivery route is being pursued. Through the 505(b)(2) process, the US FDA can use their administrative findings on safety and efficacy of another sponsor's NDA (New Drug Application), in this case, Forteo, to allow Nastech and P&G to conduct a limited preclinical and clinical program, which should shorten the timeline for the achievement of full commercialization and reduce the cost for developing the program. Once the 505(b)(2) application is submitted, the FDA will review it as it does any other application.

—A. Techman

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