Protox lands licensing deal in Japan

Protox Therapeutics (TSX:PRX) has signed a potential $75 million (U.S.) licence agreement with Kissei Pharmaceutical to develop and commercialize Protox’s PRX302 drug in Japan for the treatment of enlarged prostate, prostate cancer and other diseases of the prostate.

Under the accord, Protox will receive an upfront payment of $3 million and is eligible to receive a near-term milestone payment of $5 million, as well as progressive payments of up to $67 million, subject to reaching specific development, regulatory and commercial milestones.  Protox will also receive a double-digit royalty fee and a drug supply fee based on product sales.  Kissei will cover all development, regulatory and marketing costs in Japan.

“This transaction represents strong validation of PRX302 given Kissei’s established leadership in the Japanese urology market and proven track record in drug development,” Protox CEO Dr. Fahar Merchant said in a statement.  “For Protox, this significant milestone provides a non-dilutive infusion of cash while preserving our flexibility for developing and marketing PRX302 in the rest of the world.”

The deal prompted Versant Partners analyst Doug Loe to lift his target price on “buy-rated” Protox to $2.20 (CDN) from $1.75.

“Clearly, Kissei was sufficiently impressed by Phase 2 TRIUMPH data to make a tangible investment in PRX-302,” he writes.  The deal does not eliminate the need to identify U.S. and European partners, but the “terms are reasonably attractive for Japan, itself a large (prostrate) market.”