As part of the commercialisation agreement, Diamyd holds the right to commercialise the product in the Nordic states.
GAD65 is currently being assessed in Phase 3 clinical studies in newly diagnosed type 1 diabetes patients for its ability to delay or prevent progression of the disease and its associated complications by delaying or preventing further destruction of pancreatic islet beta cells.
As per the terms of the agreement, OMJPI is expected to make an initial payment of $45m to Diamyd and share costs of the ongoing research and development activities.
OMJPI has the right to take initiative for the global development program based on results from the first of the two ongoing Phase 3 studies in the first half of 2011.
Further, Diamyd has the right to get further payments based upon certain development and regulatory milestones, and both royalties and sales-based milestones, if the product is approved.
The transaction is expected to close in the third quarter of 2010, contingent upon clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act.
Martin Fitchet, global therapeutic area head, cardiovascular and metabolism, for OMJPI affiliate J&J Pharmaceutical R&D, said: “This approach has the potential to significantly improve the lives of patients with type 1 diabetes by focusing on beta cell function and improving glycemic control, which may potentially reduce the risk of long-term complications of this disease.
“This program strengthens our development pipeline and reflects our commitment to build a leading portfolio of pharmaceutical treatments for the care of patients with diabetes.”