ZURICH (Dow Jones)--Drugmaker Roche Holding AG (RHHBY) has entered an agreement with Halozyme Therapeutics Inc. (HTI) to use the U.S. company's technology to improve drug delivery, in a deal potentially worth up to $581 million in milestone payments.
Roche, based in Basel, said it would team up with Halozyme to apply the latter's drug delivery technology, Enhanze, to the Swiss company's biological drugs.
Separately, Roche said a new test that helps doctors detect heart failure more rapidly could help save as much as $1,000 a patient, because fewer people would be sent to hospitals unnecessarily.
Roche will pay Halozyme $20 million upfront for the application of the technology to three predefined targets. Roche may pay Halozyme further milestones, potentially reaching as much as $111 million, as well as royalties for the first three targets.
Eventually, the value of milestone payments could climb to $581 million, as Roche may make further payments of up to $47 million each for an additional 10 targets.
"The potential to improve the administration and bioavailability of subcutaneous medicines presents an important advance to make a difference to patients' lives," said Peter Hug, Roche's global head of Pharma Partnering, in a statement.
When combined with certain injectable drugs, Enhanze technology can act as a "molecular machete" to better penetrate and disperse drugs by temporarily opening flow channels under the skin.
Roche ranks among the world's 10 largest drug companies. It derives a substantial part of revenue from the sale of biological drugs, most of which were developed by Genentech Inc. (DNA), of which Roche owns a majority.
The Roche Venture Fund will make an $11 million equity investment in Halozyme, representing around 5% of the company's outstanding common stock.
At 0914 GMT, Roche shares were down CHF1.10, or 0.5%, at CHF210.50, in a higher broader market.
Separately, a Roche-sponsored study conducted in seven hospitals found that adding its NT-proBNP test to physician judgment significantly reduced the duration of the emergency department visit to an average of 5.6 hours, from an average of 6.3 hours. In addition, it reduced the number of patients hospitalized within 60 days to 33, from 51.
Researchers conducted the study on 501 patients with a mean age of 71 years, who arrived at the hospitals' emergency department with shortness of breath, a classic symptom of heart failure. However, shortness of breath is also a common symptom of other conditions such as pneumonia and some heart attacks, which forces emergency doctors to spend a lot of time trying to reach a diagnosis.
Using the test nationwide could generate yearly savings of up to $600 million in the U.S. healthcare system, Roche said.