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Novozymes’s Glaxo Tie Brings $200 Million Drug Payback Closer

Novozymes A/S (NZYMB), the world’s largest enzymes maker, is a step closer to getting a return on a pharmaceutical investment of more than $200 million as GlaxoSmithKline Plc (GSK) (GSK) seeks approval to sell its diabetes drug.

The Danish company will get a royalty in the low- to mid- single digit percentage range of sales from supplying technology that prolongs the life of the drug while in the body, Svend Licht, business development manager of Novozymes’s Biopharma unit, said in an interview. Glaxo submitted an application to begin marketing the drug in Europe under the name Eperzan last week after finishing testing.

While soaking up research money, pharmaceutical ingredients only accounts for 1 percent of Novozymes’s 11.2 billion kroner ($1.9 billion) in sales, and new drugs can take 10 years or more to get to market. Novozymes, based in Bagsvaerd, Denmark, has tied with others such as Teva Pharmaceutical Industries (TEVA) as they look to improve the performance of treatments.

“It will be a validation for all the effort put into it,” Licht said in the March 8 interview by phone. “We have believed that it will happen but the proof of the pudding is when it actually comes to market.”

Novozymes has risen 27 percent since the start of this year, valuing the company at 65.8 billion kroner, beating the 12 percent gain of the Copenhagen OMX 20 index.

Fooling the Body

The technology promises to increase the active life of the diabetes drug, meaning type 2 diabetes sufferers could inject once a week instead of daily. Novozymes uses genetically modified proteins that allow Glaxo to fuse its drug with albumin found in blood serum, fooling the body into accepting the active ingredients that it would normally deem foreign and expel.

Novozymes acquired the albufuse technology used in the Glaxo drug when it purchased Delta Biotechnology from Sanofi (SAN) in 2006. The Danish company’s scientists, working in a laboratory in the U.K., have incorporated even more flexibility into a newer second-generation version that’s already been adopted by some drugmakers, Licht said, declining to name the companies because the relationships haven’t been made public yet.

Novozymes is also supplying technology for a cancer treatment of Israeli drugmaker Teva.

Novozymes’s latest version of the technology would allow pharmaceutical makers to control the periods between doses, whether shortening or lengthening the time, Licht said. For Glaxo’s albiglutide drug, the “holy grail” would be injecting the medication on a once-a-month basis, he said.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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