BioDelivery Sciences International (BDSI) has entered into a worldwide licensing agreement with privately held Arcion Therapeutics, where BDSI will develop and commercialize topical clonidine gel (formerly ARC4558) for the treatment of painful diabetic neuropathy (PDN) and potentially other indications. 

BDSI will make an upfront payment of $2 million to Arcion in the form of unregistered shares of BDSI common stock. Additional financial terms include a milestone payment to Arcion of $2.5 million in unregistered shares of BDSI stock upon acceptance by the FDA of a New Drug Application (NDA) for topical clonidine gel and a cash payment to Arcion of between $17.5 and $35 million upon NDA approval, depending on certain regulatory and commercial considerations. In addition, the licensing agreement includes sales milestones and low single-digit royalties on net worldwide sales.

"We are excited about this late stage product where efficacy has already been demonstrated in a very painful condition with a significant unmet need," said Dr. Mark A. Sirgo, president and CEO of BDSI. "Though we remain focused on preparing our Bunavail NDA for filing in the coming months and completing our BEMA Buprenorphine chronic pain phase III trials, this product acquisition allows us to build our pipeline, while applying our expertise in pain product development, utilizing the FDA's 505(b)(2) regulatory process, and diversifying outside of opioid therapy and our BEMA technology."

Evidence has shown that clonidine stimulates an inhibitory receptor in the skin associated with pain fibers. Arcion has developed a patented topical gel formulation of clonidine and has assessed its effectiveness in reducing pain in PDN in a double-blind, placebo-controlled, phase II study where the primary study endpoint was the change in pain intensity over a three month treatment period in diabetic foot pain. A significant treatment difference was seen in the planned subset analysis of diabetic patients who had documented evidence of "functioning pain receptors" in the skin of the lower leg (p=0.01, n=63) thus, at a minimum, supporting the effectiveness of topical clonidine in diabetic patients with functioning pain receptors of the skin.  In the overall population that included patients without "functioning nerve receptors," there was a trend favoring topical clonidine gel (p=0.07, n= 182), though the overall results did not reach statistical significance. 

"These data point to a very clear and compelling therapeutic profile and regulatory strategy as BDSI makes plans to prepare for a confirmatory phase IIb study in the latter part of this year which would potentially lead to data availability before the end of 2014," said Dr. Andrew Finn, executive vice president of product development at BDSI.  "If this study meets its endpoint, BDSI plans to proceed with the phase III placebo-controlled study in the same population."