Orexo, OMJ forge alliance to develop new drugs for respiratory diseases

Agreement will initially run for three years, after which OMJ has option to extend the alliance.

Orexo, a Sweden-based pharmaceutical company, has signed a research and development alliance and license agreement with Ortho-McNeil-Janssen Pharmaceuticals and Janssen Pharmaceutica (collectively OMJ), for developing new drugs to treat respiratory diseases.

The licenses granted to OMJ include worldwide licenses to Orexo's ongoing OX-CLI and OX-ESI programs focusing on discovering and developing new small-molecule treatments for asthma, chronic obstructive pulmonary disease, and other inflammatory diseases.

In addition, OMJ will add a third internal program focusing on discovering and developing small-molecules against an undisclosed target to the alliance on the same financial terms.

Initially, the agreement will run for three years; however, OMJ has an option to extend the alliance and funding. To Orexo, the alliance will bring a research funding contribution of up to $21.5m over the first three years, including an upfront payment of $10m.

Upon the successful development and commercialization of all three initial alliance programs for multiple indications, Orexo will be entitled to total development milestone payments of up to $564m, plus additional sales milestones for each program.

Commercialized products will also provide royalties. In addition, the agreement grants Orexo an option for rights to co-promote drugs from the programs marketed by OMJ in Nordic and Baltic countries. OMJ will be responsible for all clinical development and commercialization activities, including costs.

Torbjorn Bjerke, president and CEO of Orexo, said: "I am delighted to announce this exciting alliance with OMJ in the area of new drug discovery and development. There are significant medical needs in the fields of respiratory and inflammatory diseases. This agreement adds to the other good alliances we have made and is an important element for Orexo in becoming a profitable pharmaceutical company."

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.