Santhera CEO Seeks Licensing Partners for Drug in North America

Santhera Pharmaceuticals Holding AG (SANN), a Swiss drug developer whose stock has risen more than eightfold this year, said it attracted interest from potential licensees to sell its Catena drug in North America.

“After successful results from the Phase III study, we have seen quite some interest” in the treatment for ailments including a rare muscular disease, Chief Executive Officer Thomas Meier said in an interview last week at the company’s headquarters in Liestal, near Basel. “We are open to discuss potential partnerships.”

Santhera is the best performer in the 211-member Swiss Performance Index this year on brightening prospects for the drug, called Catena in North America and Raxone in Europe. The medicine was turned down for one indication by European regulators a year ago due to lack of data.

In May, the drug met the primary goal in a final-stage study to treat Duchenne muscular dystrophy, and the company has reapplied to the European Medicines Agency to sell the drug to treat Leber’s hereditary optic neuropathy, a rare type of vision loss. In June, the EMA validated the application.

Meier forecast Catena-Raxone may achieve annual sales of 600 million Swiss francs ($670 million) for those two indications combined in Europe and North America.

Three Diseases

The company said last month it’s looking for a licensing partner in the U.S. for all three indications of the drug, which also include primary progressive multiple sclerosis, a disorder of the central nervous system. That indication has the biggest potential as more people suffer from the disease, Meier said. The treatment is in the second of three phases of clinical trials for that ailment.

Meier said the company isn’t in a rush to find a licensing partner as capital is sufficient. Last year, YA Global, an investment manager, agreed to provide Santhera with as much as 10 million francs in exchange for shares.

Santhera hasn’t reported an annual profit since its initial public offering in 2006. In 2013, the company’s loss narrowed to 5.8 million francs from 31.4 million francs a year earlier. The company ended 2013 with 5 million francs in cash.

“Last year was very difficult for Santhera, times were challenging,” Meier said.“Based on recent successes and regulatory progress we are much more optimistic for the future.”

Seeking Approval

Santhera has yet to get approval for Catena-Raxone for any of the three indications in the U.S. Santhera plans to use upfront payments and royalties from a partnership to help fund marketing costs in Germany, Switzerland, Austria and France.

“There are no effective therapies available in major markets for the indications of Raxone, so the company will have a monopoly,” Olav Zilian, an analyst at Helvea in Geneva, said by phone.

For Santhera to boost sales, the drug developer could seek a takeover by a company that has access to a network of doctors who are specialized in orphan drugs, the analyst said, naming Actelion Ltd. and Shire Plc as potential Santhera buyers.

“If there is formal interest, we will have to take a look at it, it’s an option we have to consider,”Meier said. “Our board is continuously considering options such as licensing agreements and raising capital.”

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net

To contact the editors responsible for this story: Mariajose Vera at mvera1@bloomberg.net Thomas Mulier, David Risser

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