Roche, one of the world's leading research-orientated healthcare groups, and Stressgen, a public biopharmaceutical company focused on innovative stress protein-based immunotherapeutics, announced a collaboration on the global co-development and commercialization of Stressgen's novel drug, HspE7, to treat diseases caused by the human papilloma virus (HPV).

This novel drug will complement Roche's wide range of products for the treatment of viral infections. Roche recently announced a collaboration with the Institut Pasteur to develop an extensive range of molecular diagnostic products for the early detection of HPV. Through these two agreements Roche will be in the unique position to offer tools to diagnose HPV as well as a drug to treat these devastating diseases.

Under the terms of the agreement, Roche will have the worldwide exclusive right to market and sell HspE7 and Stressgen will have the right to co-promote the product in the U.S. to certain specialized physicians

In addition to an equity investment of USD 5 million, Roche will pay Stressgen an upfront fee, and milestone payments, totalling up to USD 200 million, if all development and commercial milestones are achieved, as well as sales based payments.

"Roche has a long tradition in successfully developing and commercializing anti-viral drugs, alone or in partnership with other companies. Through this agreement, we will strengthen our leadership in this important therapeutic area, and we are looking forward to, together with Stressgen, developing a promising drug which will bring a major treatment advance to patients suffering from HPV," said William M. Burns, Head of Roche's Pharmaceuticals Division.

"We are delighted to partner with Roche, which has established a clear leadership position in the diagnosis and treatment of chronic viral diseases," said Daniel L. Korpolinski, president and chief executive officer of Stressgen. "This collaboration with Roche validates Stressgen's achievements to date in the clinic with HspE7, and provides us with an outstanding commercial partner for potential marketing of the first Hsp fusion product for HPV. We expect to build on the success of HspE7, and increase our technology pipeline by developing additional Hsp fusion candidates in the areas of hepatitis B, herpes simplex and HIV viruses."

Stressgen's s HspE7 is in Phase II drug development for genital warts, and is an engineered heat shock fusion protein that induces the body's immune system to destroy HPV infected cells. This innovative drug could treat a whole spectrum of diseases from benign skin warts to dysplasias which can lead to some forms of cancer.

HPV infection is one of the most prevalent sexually transmitted diseases, and it is estimated that there are approximately 5.5 million new cases of genital HPV infections each year in the US alone. HPV infection can also cause recurrent respiratory papillomatosis, a wart infection of the upper airways, and cervical & anal dysplasias, potentially leading to development of cancer.

The transaction is subject to regulatory approval.