Monogram sees international partnership with Pfizer on HIV testing as opening door for other products

By Jennifer Lanning Drey

Eugene, Ore., May 8 - Monogram Biosciences Inc. said its collaboration agreement with Pfizer Inc. not only opens up international opportunities to sell its HIV testing technology but could also create a base from which to promote its other products for HIV and possibly for other diseases.

The company announced Monday a non-exclusive collaboration agreement with Pfizer for global commercialization of its HIV testing technology by having Pfizer take the lead and bear the cost for international sales, marketing, regulatory and reimbursement matters of Monogram's HIV co-receptor tropism assay outside of the United States.

The HIV co-receptor tropism assay is a diagnostic tool that provides information that can help identify patients who are most likely to respond to a class of investigational drugs known as CCR5 antagonists. Pfizer has a CCR5 antagonist, maraviroc, in phase 3 development and has used the Monogram tropism assay to select patients for enrollment in late-stage clinical studies.

For Monogram, the collaboration has created a way for the company to establish business outside the United States without having to fund an international infrastructure from its own resources. It also validates the opportunity presented by the CCR5 class of drugs and of the potential role of co-receptor tropism assay as the diagnostic link to the drugs.

"Because of the important role the co-receptor tropism assay is believed to play in CCR5 antagonist clinical development, we are pleased to be expanding our partnership with Pfizer," said William D. Young, Monogram's chief executive officer, in a company news release.

With the co-receptor tropism assay being used as enrollment-screening criteria for all CCR5 trials to date, similar screening prior to prescription may be recommended, which could provide Monogram opportunities for revenue growth from around the world.

"This not only helps establish an international business for tropism but also may be an opportunity as a springboard for our other HIV products and potentially our oncology products," said Young during a company conference call on Monday.

Monogram will focus on marketing its product through its existing commercial organization in United States.

In addition to the collaboration, Monogram also announced that Pfizer Inc. has agreed to invest $25 million in the company through a 3% senior secured convertible note, payable in 2010. The note will be payable quarterly in cash, or at Monogram's option, in Monogram common stock with certain limitations.

Also on Monday, Monogram announced revenues of $13.2 million for the first quarter, which was 33% higher than its revenue of $10 million for the first quarter of last year, and identified its HIV testing products as the drive behind the increase. In that arena, the company also recently provided testing services in support of an integrase inhibitor compound in a phase 3 trial by Merck & Co. and provided testing services to Schering Plough to support the clinical development of vicriviroc, Schering Plough's investigational CCR5 receptor antagonist.

Monogram, which has also made recent advancements in the clinical development of its oncology technologies, ended the first quarter with total cash and cash investments of $67 million, or, on a pro forma basis including the anticipated proceeds from the Pfizer investment, $92 million.

"The strengthening of our balance sheet give us enhanced flexibility to address our business and financial opportunities and to facilitate Monogram's continued growth and development," said Alfred G. Merriweather, Monogram's chief financial officer in a company news release.

The collaboration agreement between Monogram and Pfizer will run through Dec. 31, 2009 and is renewable by Pfizer for five successive one-year terms.

Monogram is a San Francisco, Calif.-based company that develops and markets products to guide and improve treatment of serious infectious diseases and cancer. The company's products are designed to help doctors optimize treatment regimens for the patients that lead to better outcomes and reduced costs.

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