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Coronado Biosciences (CNDO) Buys TSO Manufacturing Rights From Ovamed

 December 27, 2012 09:22 AM


(By Balaseshan) Coronado Biosciences Inc. (NASDAQ: CNDO) said it has purchased manufacturing rights to its lead product TSO (Trichuris suis ova or CNDO-201) from Ovamed GmbH, for North America, South America, and Japan, Coronado's licensed territory.

As part of the transaction, Coronado entered into a lease agreement to establish a manufacturing facility in Woburn, Massachusetts to produce TSO (Trichuris suis ova or CNDO-201), which is a biologic for the treatment of autoimmune diseases such as Crohn's disease, ulcerative colitis and multiple sclerosis.

Coronado entered into amendments to its existing license and supply agreements with Ovamed expanding Coronado's exclusive license to include TSO manufacturing rights in Coronado's territory and terminating Ovamed's exclusive supply rights once Coronado's planned manufacturing facility is operational.

[Related -Traders Take To Coronado (CNDO) Call Options]

Build out and site preparation of the manufacturing facility are planned to commence in early 2013 and continue throughout the year to enable production of phase 3 supplies of TSO. Ovamed agreed to provide assistance in establishing the manufacturing facility and to continue to supply Coronado with clinical supplies until the facility is operational.

Ovamed retains TSO manufacturing rights outside Coronado's territory, and the amendments contemplate that Coronado and Ovamed would act as second source suppliers to each other at agreed transfer prices.

Under the amendments, Coronado will pay Ovamed a total of $1.5 million in three equal installments in 2014-2016, and, in lieu of product supply payments that would have been payable to Ovamed as the exclusive supplier, certain fees for product manufactured and sold by Coronado.

[Related -Coronado Biosciences (CNDO) Prices 5M Share Offering At 6.7 Pct Discount]

TSO (Trichuris suis ova or CNDO-201), the microscopic eggs of the porcine whipworm, is a novel, orally administered, natural immunomodulator that regulates T-Cells and pro-inflammatory cytokines.

The use of TSO as a therapeutic is based on the "hygiene hypothesis" and numerous animal and human studies. TSO was chosen as the biological agent of choice because it is not a human pathogen, and is spontaneously eliminated from the body within several weeks after dosing.

Multiple investigator-sponsored clinical trials of TSO for the treatment of Crohn's disease, ulcerative colitis and multiple sclerosis have been completed, in which TSO demonstrated benefit with regard to accepted outcome measurements of remission of disease, and was shown to be well tolerated.

CNDO closed Wednesday's regular session at $4.62. The stock has been trading between $4 and $10 for the past 52 weeks.

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