Infectious Opportunity? Nabi Biopharma Sells Staph A Vaccine To Glaxo For $46M

The sale will enable the little company to focus solely on its nicotine-addiction vaccine candidate, NicVAX.

After nearly two years of restructuring and conserving cash, Nabi Biopharmaceuticals is switching gears and hopes the sale of its Staphylococcus aureus vaccine will make it possible to focus partnering and developing its nicotine-addiction vaccine, NicVAX .

Nabi announced on Aug. 6 that it was selling PentaStaph (formerly called StaphVAX ) to GlaxoSmithKline for $46 million. The deal is structured to bring Nabi $20 million upfront, plus another $26 million pegged to four milestones the vaccine maker anticipates completing within 18 months.

The first two milestones are initiation and completion of successful Phase I trials, to be conducted in partnership with the U.S. Department of Defense, for the fourth and fifth components of the pentavalent vaccine. These are detoxified antigens of the Panton-Valentine Leukocidin (PVL) and alpha toxoid toxins, which are implicated in the virulence of S. aureus infections.

Glaxo would assume full development and commercialization of PentaStaph following the completion of those Phase I trials. The deal does not include any royalties or other potential upsides for Nabi beyond the milestones specified.

The other three components of PentaStaph, which is a polysaccharide conjugate vaccine, include antibodies of S. aureus types 5 and 8, which are contained in the outer coating of more than 80 percent of serologically active types of S. aureus bacteria, and of type 336, which accounts for roughly the other 20 percent of related infections.

Types 5 and 8 have advanced to Phase III, while type 336 has been evaluated in successful Phase I and Phase II trials demonstrating safety and the ability to generate antibodies that protect against 336-positive strains of the bacteria. "Together, these three polysaccharide conjugates cover all clinically significant serological types of S. aureus," Nabi's Web site states.

In addition to Phase I success with the PVL and alpha antigens, the other milestones specified by GSK are the completion of materials and technology transfer of program know-how to the UK-headquartered big pharma.

During an investor call to discuss second-quarter earnings, which were also released on Aug. 6, Nabi chief executive Raafat Fahim called the transaction a significant step in the pursuit of strategic alternatives over the past two years. That process began with the sale of Nabi's biologics unit to Biotest AG in 2007 for $185 million ([See Deal]).

Fahim said the PentaStaph sale should close before the end of this year. "Following the sale, Nabi's board would review the potential uses of proceeds from this asset sale with a view to maximize shareholders' value," he said. "We remain focused on securing a strategic partner for the continued development and commercialization of NicVAX and we continue to see strong interest in this program from a number of parties."

Vaccine would target unmet need in nosocomial infections

One of several pharmas that are very active in the vaccines arena, Glaxo presumably is bullish on PentaStaph because of the high unmet need for new clinical approaches to community- and health care-related cases of S. aureus infection. An increasingly prevalent problem is Methicillin-resistant S. aureus (MRSA), often a complication related to nosocomial infections in surgical patients or those with open wounds or using invasive devices, Fahim said.

According to Centers for Disease Control and Prevention 2007 surveillance data, invasive MRSA infections occur in approximately 94,000 persons annually in the U.S., and are associated with about 19,000 deaths. Eighty-six percent of these infections are health care-related, CDC adds, and the proportion of health care-related S. aureus infections due to MRSA increased from 2 percent in 1974 to 64 percent in 2004.

"We believe in the potential of PentaStaph and are confident that GSK will continue to develop this vaccine into a successful weapon against the growing threat of Staphylococcus infection," Fahim said.

During the investor call, he also noted that the European Medicines Agency has provided advice on protocols for Phase III development of NicVAX. Nabi has been preparing to initiate a Phase III program over the past two years and has agreed to a special protocol assessment with FDA for the vaccine's development.

Although PentaStaph is further along in its development, Nabi has placed its focus on the anti-nicotine product because of Pfizer's problems with its smoking-cessation drug Chantix (varenicline) (Also see "Pfizer’s Loss Could Be Nabi’s Gain In Stop-Smoking Space" - Pink Sheet, 27 May, 2008.). FDA added a warning about mood changes and erratic behavior related to the drug's label in February 2008.

More recently, FDA mandated Phase IV post-marketing studies for Chantix and a competitor, GSK's Zyban ( (Also see "Chantix, Zyban Safety Issues Put Focus On REMS Assessment Efforts" - Pink Sheet, 6 Jul, 2009.), p. 36).

Nabi, which had nearly $109 million in cash, cash equivalents and marketable securities on hand at the end of the second quarter, reported R&D expenses of $3.4 million for the quarter. But Fahim clarified that those expenses would "increase significantly over the remainder of 2009" if NicVAX moved into Phase III.

Since Fahim's appointment as CEO and president in January 2008, Nabi has been pursuing various strategies, including potential mergers or a partnership for NicVAX (Also see "Nabi Announces Plans To Evaluate Merger Or Sale Of Firm Under New CEO" - Pink Sheet, 24 Jan, 2008.). Fahim indicated that with the SPA in place plus EMEA's input, the company is ready to move forward with a Phase III program for the nicotine-addiction candidate.

"We now have support and guidance from the world's leading regulatory agencies," he said.

- Joseph Haas ([email protected])