OMJPI, Diamyd Medical sign agreement to develop and commercialize GAD65 antigen-based therapy

Ortho-McNeil-Janssen Pharmaceuticals, Inc. (OMJPI) announced today it has signed an exclusive agreement with Diamyd Medical AB, a Swedish publicly traded company focusing on the development of pharmaceuticals for the treatment of autoimmune diabetes and its complications, to develop and commercialize their GAD65 antigen-based therapy for the treatment and prevention of type 1 diabetes and associated conditions. This investigational therapy is currently being evaluated in Phase 3 clinical studies in newly diagnosed type 1 diabetes patients for its ability to delay or prevent progression of the disease and its associated complications by delaying or preventing further destruction of pancreatic islet beta cells.

“This program strengthens our development pipeline and reflects our commitment to build a leading portfolio of pharmaceutical treatments for the care of patients with diabetes.”

Under terms of the agreement, OMJPI will make an initial payment of $45 million to Diamyd and share costs of the ongoing research and development activities. OMJPI has the right to fully assume responsibility for the global development program upon reviewing results from the first of the two ongoing Phase 3 studies in the first half of 2011. Over the span of the program, Diamyd is eligible to receive further payments based upon certain development and regulatory milestones, and both royalties and sales-based milestones, if the product is approved. As part of the commercialization agreement, Diamyd retains the right to commercialize the product in the Nordic states.

"This approach has the potential to significantly improve the lives of patients with type 1 diabetes by focusing on beta cell function and improving glycemic control, which may potentially reduce the risk of long-term complications of this disease," said Martin Fitchet, M.D., Global Therapeutic Area Head, Cardiovascular & Metabolism, for OMJPI affiliate, Johnson & Johnson Pharmaceutical Research & Development, L.L.C. "This program strengthens our development pipeline and reflects our commitment to build a leading portfolio of pharmaceutical treatments for the care of patients with diabetes."

The transaction is expected to close in the third quarter of 2010, contingent upon clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act.