Shire plc, the global specialty biopharmaceutical company, and US-based privately held biotechnology company, ArmaGen announced a worldwide licensing and collaboration agreement for AGT-182, an investigational enzyme replacement therapy (ERT) for the potential treatment of both the central nervous system (CNS) and somatic manifestations in patients with Hunter syndrome (MPS II).

This collaboration strengthens Shire’s rare disease pipeline of innovative therapies where there is high unmet need, and underscores the company’s long standing commitment to the Hunter syndrome community.

Under the terms of the agreement, Shire will obtain worldwide commercialization rights for AGT-182 in exchange for payments of approximately $225 million to ArmaGen, including an initial upfront payment of $15 million in cash and equity, an additional equity investment, R&D funding, development milestones and sales milestones, in addition to royalty payments. As part of the agreement, ArmaGen will be responsible for conducting and completing the phase I/II study which it expects to initiate before the end of 2014, after which point Shire will be responsible for further clinical development, including phase III trials, and commercialization.

Dr Philip J Vickers, global head of research and development at Shire, said, “Our agreement with ArmaGen marks our continued promise to the Hunter syndrome community to bring novel therapies that have the potential to dramatically redefine the treatment paradigm and address the most critical unmet needs. AGT-182 has the potential to be an important new therapy to our portfolio of programs for the treatment of both the CNS and somatic manifestations of Hunter syndrome. We look forward to collaborating with ArmaGen and leveraging our ability to successfully develop medicines to treat this rare, life-threatening disease.”

Shire researched, developed and commercialized the first treatment approved for Hunter syndrome. This agreement with ArmaGen expands Shire’s commitment to finding treatments for Hunter syndrome, which also includes SHP-609, Shire’s product currently being investigated to treat the CNS manifestations associated with Hunter syndrome.

James Callaway, chief executive officer of ArmaGen said, “Shire is the ideal partner for AGT-182, based on the company’s international reach and expertise in serving patients with Hunter syndrome. We look forward to beginning the phase I/II clinical trial of AGT-182 in collaboration with Shire and leveraging their expertise with these patients.”

AGT-182, which has received orphan drug designation from both the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA), is designed to take advantage of the body’s natural system for transporting products across the blood brain barrier (BBB) by using the same receptor that delivers insulin to the brain. AGT-182 is engineered by the fusion of the replacement IDS enzyme to an antibody that binds to a receptor on the BBB. The IDS enzyme is designed to cross the BBB attached to that antibody.

Hunter syndrome or Mucopolysaccharidosis II (MPS II) is a rare, life-threatening genetic disorder that results from the absence or insufficient levels of the lysosomal enzyme iduronate-2-sulfatase. Without this enzyme, cellular waste products called mucopolysaccharides, also known as glycosaminoglycans or GAGs accumulate in tissues and organs, which then begin to malfunction. Possible signs and symptoms include large head, enlarged abdomen, frequent ear infections, difficulty breathing, joint stiffness, and short stature. It is estimated that 2/3 of all MPS II patients will be affected with CNS disease; this translates into a prevalence of around 1,200 patients worldwide.