GenVec's Hearing Loss Program Gets Welcome Boost from Novartis

Includes: GNTX, NVS
by: The Burrill Report

GenVec's (NASDAQ:GNTX) pre-clinical treatment for hearing loss and balance disorders has new support from Novartis' (NYSE:NVS) deep pockets, following the consummation of a deal worth up to $213.6 million for the Gaithersburg, Maryland biopharmaceutical company. The agreement, part of a steady licensing-driven pipeline expansion for Novartis, gives the Swiss pharmaceutical global rights to GenVec's hearing loss and balance disorders program, which has shown potential in the restoration of hearing and balance loss in certain cases where no treatment currently exists.

Hearing loss is divided into two main categories: conductive hearing loss, due to mechanical problems in the outer or middle ear and sensorineural hearing loss, due to inner ear problems. While conductive hearing loss is often reversible, sensorineural hearing loss does not have a known or approved treatment. GenVec estimates that the market for hearing loss treatments alone might represent an opportunity of at least $6 billion.
Novartis will acquire $2 million of GenVec stock as part of the deal. In addition, GenVec will receive further funding from Novartis for a second research program targeting hearing loss. GenVec is eligible to receive up to $213.6 million altogether, including upfront and milestone payments, in addition to royalties on future sales.
GenVec's CEO, Paul Fischer says the collaboration with Novartis “provides an excellent mechanism to move the development of new treatments forward.”
The deal, officially inked between GenVec and the Novartis Institutes for BioMedical Research on January 13, provides GenVec a welcome turn of fortune, considering the company flirted with being delisted from the Nasdaq in September 2009 after the minimum bid price of its common stock fell below $1.00 per share for 30 consecutive business days. The company regained compliance in January.
GenVec's leading drug candidate, TNFerade, is currently in a pivotal late-stage study of its effectiveness in treating locally advanced pancreatic cancer. TNFerade is also being evaluated for its potential use in the treatment of several other cancers, including esophageal cancer, rectal cancer, and head and neck cancer.