(Adds details, analyst comment, previous forecast)
HELSINKI, June 2 Finnish drug maker Orion
said on Monday it had struck a deal with German peer
Bayer to develop a prostate cancer drug, with the
deal allowing Orion to upgrade its full-year sales and profit
The two companies will this year start a clinical phase III
trial of the drug, called ODM-201, in patients with
non-metastatic prostate cancer that cannot be treated by
standard hormone therapy, Orion said in a statement.
Orion and Bayer will develop the new drug together, with
Bayer contributing a major share of the development costs. Bayer
would sell the product globally, and Orion said it was eligible
for substantial royalties. It can also receive payments as
development of the drug progresses.
"For Orion, joining up with a muscular partner is a good way
to control risks, it lets Bayer pay the development costs and
then gets royalties if the drug proceeds to production phase,"
said Inderes analyst Petri Kajaani. "The reaction in the stock
market should be positive."
Orion will receive an upfront payment of 50 million euros
($68 million), it said, and added it would use a part of that to
finance the study in the third and last phase of development
required for regulatory approval.
Orion raised its profit forecast for the year, and now says
its net sales and operating profit will be at a similar level as
last year. Previously it had seen its operating profit falling
The Finnish company's Parkinson's drug Stalevo, which brings
in one-fifth of its sales, faces competition from European
rivals as the protection period on clinical data for the drug
expired in October.
Bayer said the deal would complement its prostate cancer
treatment business. It already has Xofigo, designed to target
bone metastases from prostate cancer, which according to Bayer
could become a "blockbuster" product with annual sales of least
1 billion euros.
($1 = 0.7328 Euros)
(Reporting by Sakari Suoninen; Editing by Louise Heavens)