SQUIBB DIAGNOSTICS/ADVANCED MAGNETICS MRI IMAGING AGENT DEAL

Executive Summary

SQUIBB DIAGNOSTICS/ADVANCED MAGNETICS MRI IMAGING AGENT DEAL gives Squibb North American marketing rights to two MRI products in preclinical development and rights to use the products' technology for development of additional organ-specific agents for magnetic resonance imaging. In exchange for the marketing/technology rights, Advanced Magnetics will receive $ 10 mil. in staged licensing fees, plus royalties based on future sales. At the closing of the deal, Advanced Magnetics received $ 4 mil. of the licensing fees. Under the agreement, announced Feb. 6, Squibb Diagnostics is responsible for the clinical development and regulatory submissions for the two MRI agents, AMI-HS and AMI-227. AMI-HS is a "hepatocyte-specific agent for imaging liver tumors," and AMI- 227 has potential applications "in imaging the lymph nodes and bone marrow, and in measuring perfusion (blood flow) to the brain and heart," the firms said. Squibb anticipates beginning human clinical trials with the two agents in the next 12 to 18 months. The two imaging agents will provide follow-up compounds for Squibb Diagnostics' existing MRI research product, Prohance (gadoteridol injection). The company is in Phase III clinicals with the brain and spine imaging agent. Commenting on the agreement, Squibb Diagnostics President Michael Loberg said that "these two compounds promise to be among the first of a new generation of organ-specific MRI agents and we're delighted that Squibb Diagnostics is going to play an important role in making that happen." Advanced Magnetics CEO Jerome Goldstein, noting that the agreement "culminates more than two years of intense negotiations," said: "By establishing this partnership with Squibb Diagnostics, we have forged a crucial alliance with a seasoned and experienced leader in what may well be the most important imaging market in the world." The deal with Squibb is Advanced Magnetics' second North American marketing agreement for its MRI imaging agents. In July, the firm announced an agreement granting Mallinckrodt comarketing rights to its gastrointestinal MRI imaging agent in the U.S., Canada and Mexico. Phase III trials with the as-yet-unnamed gastrointestinal agent have been completed, and Advanced Magnetics says it plans to submit an NDA to FDA later this year. To date, the only imaging agent that has been approved for use with MRI is Berlex' Magnevist.