GlaxoSmithKline and Tolerx Form Worldwide Collaboration for Development and Commercialization of Novel Medication

Date Posted: Wednesday, October 24, 2007

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GlaxoSmithKline and Tolerx, Inc. have announced the execution of a worldwide alliance to develop and commercialize otelixizumab (TRX4), a novel humanized anti-CD3 monoclonal antibody that has potential across a broad range of autoimmune and immune-mediated inflammatory diseases, including type 1 diabetes.

Otelixizumab has been evaluated in type 1 diabetes in two Phase II studies and in psoriasis in two Phase I studies. In clinical trials, otelixizumab has been shown to preserve the function of insulin-producing beta cells in the pancreas in patients with type 1 diabetes, reducing the amount of administered insulin needed to control blood glucose levels.

Under the terms of the agreement, Tolerx will have responsibility for the Phase III clinical programme for type 1 diabetes in the US up to and including regulatory submission of the biologics license application (BLA).

Tolerx has the option to co-promote otelixizumab in type 1 diabetes in the US with GSK, while GSK will have exclusive rights to develop and commercialize otelixizumab in all other indications in the rest of the world. GSK also has the exclusive right to develop the paediatric indication for type 1 diabetes in the US.

As part of the collaboration, Tolerx will receive an upfront payment, equity and advance R&D funding totaling $70 million. In addition, Tolerx may receive up to $155 million in future development costs of otelixizumab in type 1 diabetes. Tolerx may earn up to $350 million in milestone payments, assuming successful development and approvals of otelixizumab for type 1 diabetes and multiple additional indications.

Tolerx may also receive up to $175 million in sales milestone payments based on tiered net sales thresholds of otelixizumab. Tolerx will be entitled to receive tiered, double-digit royalty payments on worldwide sales of otelixizumab in all indications. At the time of an initial public offering of Tolerx’s common stock and at the request of Tolerx and certain other conditions, GSKwill invest up to an additional $10 million in Tolerx’s common stock.

Dr. Moncef Slaoui, Chairman of Research and Development at GSK, commented: “Otelixizumab is another welcome addition to GSK’s rapidly expanding biopharmaceuticals pipeline. This is a key area of future growth and investment for GSK and, as a novel treatment for many T cell-mediated diseases, the potential of otelixizumab is significant. Together with Tolerx, who are pioneers in this area of science, we hope to realize the potential of this compound and bring a valuable new treatment option to patients suffering from type 1 diabetes and other autoimmune disorders.”

Further Information: http://www.gsk.com

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