New Scripps drug may bring mil­lions

Ozan­i­mod, used by MS pa­tients, be­ing tested to treat in­testi­nal dis­or­der.

The Palm Beach Post - - FRONT PAGE - By Jeff Ostrowski Palm Beach Post Staff Writer

If the new drug ozan­i­mod achieves block­buster sta­tus, it could gen­er­ate tens of mil­lions of dol­lars a year in roy­al­ties for The Scripps Re­search In­sti­tute — and pro­vide re­lief from the on­go­ing fi­nan­cial chal­lenges fac­ing the non­profit lab.

Scripps won’t say how much it stands to re­ceive from sales of ozan­i­mod, a drug that slows brain atro­phy in pa­tients with mul­ti­ple scle­ro­sis. Scripps dis­cov­ered the drug, then part­nered with Cel­gene to shep­herd the medicine through clin­i­cal tri­als. The bio­phar­ma­ceu­ti­cal com­pany ex­pects to be­gin mar­ket­ing the drug to MS pa­tients in late 2018.

Cel­gene (Nas­daq: CELG) also is test­ing ozan­i­mod as a treat­ment for ul­cer­a­tive col­i­tis, which is more com­mon than MS. If ozan­i­mod wins ap­proval as a medicine for the in­testi­nal dis­or­der, sales could reach $4 bil­lion to $6 bil­lion a year.

Scripps says its roy­alty ar­range­ment with Cel­gene is con­fi­den­tial. Brian Sko­r­ney, an an­a­lyst who fol­lows Cel­gene for Robert W. Baird & Co., said the typ­i­cal deal pays a drug’s in­ven­tor “in the low sin­gle-digit per­cent­age.”

So, if ozan­i­mod’s sales reach $4 bil­lion and Scripps gets a 2 per­cent

cut, that would amount to $80 mil­lion a year. It would be a wel­come wind­fall for Scripps, which has seen its rev­enue de­cline steadily in re­cent years.

The non­profit lab’s rev­enue fell to $347.5 mil­lion for the year ended Sept. 30, 2016, ac­cord­ing to a fi­nan­cial state­ment, down from $362.5 mil- lion the pre­vi­ous year.

It was the fifth con­sec­u­tive year of de­clin­ing rev­enue for San Diego-based Scripps, the sci­en­tific jug­ger­naut that’s the an­chor of Florida’s bil­lion-dol­lar bet on biotech. Scripps in 2016 re­ported its low­est an­nual rev­enue since 2004.

Scripps’ net as­sets dipped to $637 mil­lion, down from $647 mil­lion in 2015 and the low­est level since 2007.

Dr. Hugh Rosen, a Scripps re­searcher who’s the co-in­ven­tor of ozan­i­mod, said the in­sti­tute’s agree­ment with Cel­gene calls for roy­alty pay­ments through 2033 or 2034.

“It could be a sig­nif­i­cant con­trib­u­tor to the health of the in­sti­tu­tion,” Rosen said.

Pa­tient stud­ies proved that ozan­i­mod is safe and ef­fec­tive, but it’s still no sure thing. Sko­r­ney said ozan­i­mod faces com­pe­ti­tion from other MS drugs.

“It’s a very crowded space in terms of the num­ber of ef­fec­tive treat­ments, so we’ll see how Cel­gene ends up pric­ing it,” Sko­r­ney said.

Rosen said ozan­i­mod’s jour­ney from the lab to the doc­tor’s of­fice un­der­scores the long-term na­ture of sci­en­tific re­search. In 2002, he started the work that led to ozan­i­mod, and a flurry of tests from 2006 to 2008 ul­ti­mately yielded the new drug.

“It will be lit­er­ally 10 years from dis­cov­ery to launch for pa­tients, and that’s about as fast as you could hope for,” Rosen said.

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