Vancouver’s Cardiome Pharma Corp. (TSX:COM) saw its share price climb 8% Friday after the biotech company announced one of its drugs had been recommended for approval in the European Union (EU).
A committee in the EU’s drug regulating body recommended Cardiome’s intravenous treatment for atrial fibrillation, a form of abnormal heart rhythm.
That brings Cardiome a step closer to receiving millions in milestone payments from its development partner Merck & Co. Inc. (NASDAQ:MRK). Those payments will likely be triggered within three months when the drug receives market approval in the EU.
Reuters reported that recommendations for marketing approval by the Committee for Medicinal Products for Human Use (CHMP) are normally endorsed by the European Commission within a couple of months.
In April 2009, Merck received the ownership rights outside of the U.S. for the intravenous (IV) form of Vernakalant which Cardiome had taken to Phase 3 trials, the last stage before market approval. Merck also received global rights to the oral form of the drug, which is in Phase 3 trials.
In exchange, Cardiome received a US$60 million payment immediately and a US$15 million milestone payment last July. A total of US$50 million in milestone payments are to be triggered this year by Merck’s initiation of another Phase 3 trial of Vernakalant oral and by the market approval of Vernakalant IV in Europe.
That leaves another US$515 million in potential development, approval and sales payments that Cardiome could receive from Merck.
BIV outlined Cardiome’s deal with Merck, which is one of the largest in the Canadian biotech industry’s history, in April. (“$914 million Merck deal sets Cardiome Pharma Corp. on promising biotech path” – issue 1069; April 20-26, 2010)