Novo Nordisk (NVO) is terminating its 18 month partnership with Zosano Pharma Corporation to use that company’s micro-needle application to deliver glucagon-like peptide-1 (GLP-1) analogues for the treatment of type 2 diabetes.

The termination of the collaboration, which had the potential to generate more than $115 million in revenue, was announced this morning. Novo Nordisk paid Zosano $1 million in an upfront payment last year at the beginning of the collaboration. In a statement, Zosano said the agreement termination was related to a “strategic prioritization of NVO‘s research portfolio despite continued progress during the collaboration period.”

Danish-based Novo Nordisk is the world’s largest insulin maker. The company manufactures a number of diabetes treatments, including Victoza, NovoLog and Levemir.

Zosano and Novo Nordisk entered into their collaboration agreement in January 2014 to develop a new transdermal presentation of Novo Nordisk’s proprietary human GLP-1 analogues, also known as Semaglutide, to be administered once weekly using Zosano‘s micro-needle patch system for the treatment of type 2 diabetes. Under terms of the initial agreement Zosano granted Novo Nordisk license to develop and commercialize Novo Nordisk‘s proprietary GLP-1 analogues using the company’s micro-needle patch system. The agreement had the potential to generate more than $115 million in payments from Novo Nordisk to Zosano pending successful commercialization of products with the micro-needle system. Payments were designed to total more than $60 million for the first product and $55 million for each additional product that was approved.

Zosano‘s micro-needle patch delivers therapeutic compounds through the skin and provides systemic drug delivery in a system designed to be needle-free and pain-free system. The delivery system has been tested more than 400 patients with over 30,000 patches successfully applied to humans in Phase I and Phase II clinical studies, the company said.

Zosano said all technology rights licensed to Novo Nordisk that were related to the GLP-1 products will revert back to the company upon final termination of the agreement.

In April Novo Nordisk announced its Saxend, a once-daily glucagon-like peptide-1 (GLP-1) receptor agonist for chronic weight management in adults, was available for sale in the United States. Obese individuals often develop type 2 diabetes.

In June Zosano completed enrollment in a Phase II clinical trial of ZP-Glucagon for severe hypoglycemia in diabetics, delivered through its investigational patch treatment. The trial is designed to investigate the safety and pharmacokinetics, as well as the efficacy to reverse insulin-induced hypoglycemia, of ZP-Glucagon versus intramuscular injections at two different dose levels. Adult participants diagnosed with type 1 diabetes were enrolled at two clinical sites, the company said.

Also in June, Zosano said it secured $15 million in debt financing through Hercules Technology Growth Capital, Inc., which will be used to pay off $11.4 million owed to BioMed Ventures under a 2012 promissory note. Vikram Lamba, chief executive officer of Zosano, said the financing will be used to improve its “better align the company’s cash runway with its strategic plans.”

July 6, 2015
By Alex Keown, Breaking News Staff