Gilead and Japan Tobacco pen HIV licensing deal

Under the terms of the agreement, Japan Tobacco (JT) has granted Gilead exclusive rights to develop and commercialize a novel HIV integrase inhibitor, JTK-303, in all countries of the world, excluding Japan where JT will retain rights.

Gilead will pay to JT an upfront payment of $15 million and additional cash payments of up to $90 million upon the achievement of certain milestones. Gilead will also pay to JT a royalty based on future product sales in the territories where Gilead will market the drug.

As a result of the financial impact of this agreement, Gilead is providing an update on its financial guidance for R&D expenses for 2005. Gilead’s revised guidance for full year R&D expenses is now in a range of $250 to $270 million, up from the guidance of $240 to $260 million provided in January.

“We are very pleased to partner with JT to develop this compound, which is from a novel class of drugs that target the integrase enzyme,” said Dr John Martin, president and CEO, Gilead Sciences. “We believe this particular compound has a profile that is complementary to our existing HIV products, and we look forward to advancing it forward in clinical trials later this year.”

JT’s compound has previously been evaluated in a phase I study in Japan to assess bioavailability and pharmacokinetics in healthy volunteers, and Gilead plans to initiate phase I/II clinical studies in HIV-positive patients by mid-year 2005.

Gilead and JT first partnered in July 2003, when the companies announced an agreement granting JT commercialization rights for Truvada (emtricitabine and tenofovir disoproxil fumarate), Viread (tenofovir disoproxil fumarate) and Emtriva (emtricitabine) in Japan.

Although JT is a leading manufacturer of tobacco products, since its privatization in 1985 the company has actively diversified its operations into pharmaceuticals and foods.

The JTK-303 agreement is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act.