GlaxoSmithKline and Unigene Laboratories have entered into a development services and clinical supply agreement. Unigene will receive as much as $2.2 million in milestone payments from GSK to undertake certain development and manufacturing activities related to the API and finished drug product for an oral formulation of a recombinantly produced investigational parathyroid hormone (PTH) analog for the treatment of osteoporosis in postmenopausal women in advance of GSK’s potential decision to study the molecule in a Phase 3 program.

Unigene is developing its investigational oral PTH in collaboration with GSK as part of an exclusive worldwide licensing agreement; its oral PTH is currently in Phase II, with top-line results from this study expected before year end.

In December 2010, Unigene entered into an amended and restated exclusive worldwide license agreement with GSK to develop and commercialize an oral formulation of a recombinantly produced PTH analog for the treatment of osteoporosis in postmenopausal women. Under the terms of the new agreement, Unigene is responsible for the manufacture of the PTH and the conduct of the Phase II study. Unigene received an upfront payment of $4 million to cover costs associated with the study, received an additional $4 million payment in May upon completion of patient enrollment, and is eligible to receive further payments of as much as $140 million based on the achievement of regulatory and commercialization milestones. In addition, Unigene is eligible to receive tiered double-digit royalties in the low-to-mid teens on global sales. Once the Phase II study has been completed and based on a review of the data, GSK may elect to assume responsibility for all future development and commercialization of the product.

Ashleigh Palmer, president and chief executive officer of Unigene, said, “We have made tremendous progress with our Phase II program since the beginning of the year and are thrilled to be working closely with GSK on the most advanced oral PTH in development. We believe the signing of this agreement reflects our validated, proprietary oral peptide delivery technology and state-of-the-art recombinant manufacturing capabilities and our growing leadership in the peptide sector. We are highly focused on advancing our oral PTH that we believe has the potential to address such an important medical need.”