GSK, Nabi Enter NicVAX Pact

GlaxoSmithKline and Nabi Biopharmaceuticals entered an exclusive worldwide option and licensing agreement for nicotine conjugate candidate vaccine NicVAX, an investigational vaccine for the treatment of nicotine addiction and the prevention of smoking relapse, as well as for the development of a second generation nicotine vaccine.

Nabi will receive $40 million upfront and GSK will have an option to exclusively in-license NicVAX on a worldwide basis and a license to develop follow-on next-gen nicotine vaccines using Nabi’s intellectual property. Nabi is eligible to receive more than $500 million in option fees and regulatory, development and sales milestones. Nabi will also receive royalties on global sales of NicVAX and next-gen nicotine vaccines, should GSK exercise its option.

NicVAX is currently in Phase III trials. Nabi will be responsible for the Phase III development costs. Upon successful completion of the Phase III studies, GSK can exercise its option to take over further development and commercialization.

“If approved, this smoking cessation vaccine technology could be a novel solution to help the millions of smokers who want to stop smoking and remain abstinent, a habit that is well documented to be very hard to stop permanently,” said Jean Stephenne, president of GSK Biologicals. “This technology builds our capability in the therapeutic uses of vaccines and is a great addition to our smoking cessation portfolio.”

“We are very pleased with this deal and proud it is with GSK, one of the world’s leading vaccine companies, to further develop and commercialize NicVAX,” said Dr. Raafat Fahim, president and chief executive officer of Nabi Biopharmaceuticals. “We look forward to addressing one of the largest unmet medical needs of our time with what we believe will be an effective tool to help people quit smoking and remain smoke-fee for the rest of their lives.”

The transaction, subject to approval and customary closing conditions, is expected to close in 1Q10.