Hopkinton, MA, December 10, 1996--Creative BioMolecules, Inc. (Nasdaq: CBMI) today announced that they have signed an agreement with Biogen, Inc. (Nasdaq: BGEN) to collaborate on the development of novel therapeutics for the treatment of renal disorders. The initial focus of the alliance is on advancing the development of Creative's morphogenic protein, OP-1, for the treatment of acute and chronic renal failure. Biogen's investment could total over $122.5 million in equity, technology access fees, research support, development milestones and a line of credit.
Under the terms of the agreement, Biogen will fund the renal program and will have responsibility for preclinical and clinical development of OP-1, as well as for commercial manufacturing. Biogen receives exclusive worldwide rights to market and sell OP-1 and OP-1 products developed through the collaboration for the treatment of renal disease.
Creative will focus on research and development for the renal program and on production of OP-1 for preclinical and clinical studies. Creative retains rights to OP-1 for all other applications outside the renal field and the orthopedic/dental indications which are being commercialized with Stryker Corporation.
Biogen is paying Creative $28 million on the effective date of the agreement, which includes a $10 million upfront payment and an $18 million equity investment in shares of Creative common stock at a purchase price of $11.67 per share, a substantial premium over market. In addition, Biogen will provide $10.5 million in research support over the next three years and will pay up to $69 million upon the attainment of certain development milestones. Biogen will pay Creative royalties on the sale of products commercialized through the collaboration. Biogen will also provide Creative with a $15 million line of credit over the next three years to fund a small molecule research program based on OP-1. Biogen will conduct early clinical trials on OP-1 in renal diseases using product supplied by Creative.
Michael M. Tarnow, President and Chief Executive Officer of Creative BioMolecules, said, "This agreement provides a major validation of our technology platform. Our promising preclinical research in renal disorders is demonstration that OP-1 has a broad role in the formation of tissue in the human body." Mr. Tarnow added, "Our goal is to move our technology through the development process to commercialization in an efficient and timely manner. Biogen is an outstanding company with the resources, experience and commitment to assure the accelerated development of OP-1. This agreement will also provide Creative with the resources to move aggressively to expand applications of our technology platform in tissue regeneration with OP-1, with other molecules in our portfolio and in our small molecule research program."
Over the last several years, Creative and its collaborators have established through peer reviewed journals a strong rationale for OP-1 in renal development. Most recently, at the American Society for Nephrology's Annual Meeting in November 1996, the company and its collaborators at the Massachusetts General Hospital, National Institutes of Health, and University of Miami presented preclinical data showing the protein's ability to protect against kidney damage in the treatment of acute and chronic renal failure. Acute renal failure, which is characterized by the rapid and sudden loss of the kidney's ability to filter blood, affects an estimated 250,000 people in the United States each year. Acute renal failure is often associated with multiple organ failure and a high mortality rate. A therapy which prevents, improves recovery or reduces the extent of kidney injury from acute renal failure would be a major medical advance. Chronic renal failure is a gradual and progressive loss of kidney function often associated with diabetes and high blood pressure. Chronic renal failure affects an estimated 700,000 people in the United States. Patients with chronic renal failure typically progress to end-stage renal disease, requiring dialysis or kidney transplantation.
The statements in this news release that are not historical facts include forward-looking statements that involve risks and uncertainties. Factors which could cause actual results to differ from the Company's expectations include, without limitation, progress toward the achievement of product development milestones by the Company, the impact of competitive products, the need for timely receipt of regulatory clearances required for clinical testing, manufacturing and marketing of products and the other risks and uncertainties detailed from time to time in the Company's periodic reports. The agreement is subject to notification under Hart-Scott-Rodino.
Creative BioMolecules, Inc., headquartered in Hopkinton, MA, is a discovery and development company focused on proprietary therapeutics for human tissue regeneration and restoration. The Company's therapeutics are based on proteins that act as signals in initiating and regulating the cellular events involved in tissue and organ formation.
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