Cephalon has licensed the hydrophobic drug delivery system (HDDS) and a reformulated version of paclitaxel, called AI-850, from Acusphere in a $10m deal.
The licensing agreement for the technology, designed for drugs that do not dissolve well in water, is in keeping with Cephalon's attempts to build up its anti-cancer portfolio in the past few years.
In 2005 Cephalon purchased Trisenox (arsenic trioxide) from Cell Therapeutics, Salmedix and Zenus Pharma.
Through these acquisitions Cephalon has built a portfolio covering breast cancer, T-cell lymphoma, non-Hodgkin's lymphoma and acute promyelocytic leukemia.
Frank Baldino, CEO of Cephalon, stated: "Cephalon has a growing oncology business with a deep and diverse portfolio of marketed products and pipeline compounds.
"The addition of the HDDS technology, and AI-850 in particular, will build on our expertise and expand our oncology portfolio."
The HDDS converts hydrophobic drugs into microparticles or nanoparticles and embeds them in small microspheres, enabling the drug to quickly dissolve in water. It is particularly useful for making hydrophobic drugs suitable for injectable or intravenous formulations.
Acusphere says HDDS has improved dissolution rates by up to 30 times in pre-clinical studies and offers a drug formulation for administering hydrophobic drugs that doesn't use unsafe additives in its formulation.
HDDS is used to deliver AI-850, a reformulation of paclitaxel, the active ingredient the original brand of paclitaxel, Bristol-Myers Squibb's Taxol.
By using HDDS the system avoids the use of Cremophor (polyethoxylated castor oil) a solvent used in Taxol's formulation which is known to cause severe hypersensitivity reactions in some patients.
Another breast cancer treatment Abraxis BioScience's Abraxane, a protein-bound paclitaxel, doesn't suffer from the hypersensitivity reactions associated with Taxol and has enjoyed growth of 65 per cent over the last year, with sales of $86m.
According to Acusphere AI-850 is a bioequivalent to Abraxane and as such may have an accelerated development timeline, since Phase II and III trials are not usually required for generic drugs.
If AI-850 manages to capture a proportion of Abraxane's revenues, which Acusphere believe could be $1bn by 2013, Cephalon's $10m licensing deal will look like a very shrewd acquisition.
From Acusphere's perspective $10m may help them push on with their Imagify technology, which is a minimally invasive way of evaluating a patient's risk of suffering a heart attack.
The cash injection will be welcomed at Acusphere, which is currently going through a rough patch with share prices falling from $4.21 in May 2007 to a low of $0.31 in March.
In January Nasdaq wrote to Acusphere saying it would be removed from its listings if the share price wasn't above $1 for ten consecutive business days before July 8.
Cephalon's licensing deal has seen share price rise above $0.60 and Sherri Oberg, president and CEO of Acusphere said she was "very pleased with the terms of this transaction".
Acusphere maintains the right to license the HDDS to other companies for other applications in the future, creating the possibility of further licensing agreements similar to the Cephalon deal.
Speaking to in-PharmaTechnologist.com Mary Conway, investor relations for Acusphere, said: "It is an exclusive license for oncology applications. Acusphere can license the technology for other applications to other companies in the future."