The up to $117-million-deal gets Mallinckrodt Ocera’s Phase II hepatic encephalopathy candidate OCR-002.

Shortly after announcing the acquisition of neonatal and pediatric drug developer InfaCare Pharmaceutical for up to $425 million, including an $80 million upfront payment, Mallinckrodt reported that it is acquiring Ocera Therapeutics and its pipeline of treatments for orphan and other liver and kidney diseases for up to $117 million.

Ocera’s most well-known candidate is OCR-002 (ornithine phenylacetate) for the treatment of hepatic encephalopathy. The ammonia scavenger, which includes ornithine and phenylacetate, acts by eliminating ammonia from the blood stream through the kidneys, missed its primary endpoint in a Phase II STOP-HE trial earlier in 2017. The drug exhibited a statistically insignificant 17-hour reduction over placebo (47 vs. 64 hours) for time to improvement in hepatic encephalopathy symptoms in STOP-HE, which evaluated the safety and efficacy of intravenously administered OCR-002 in resolving neurocognitive symptoms of acute hepatic encephalopathy in hospitalized patients with elevated ammonia.

OCR-002 did, on the other hand, result in a significant reduction in circulating ammonia for patients with higher doses of the drug, who also had faster clinical improvement and greater complete response rates than patients on the lowest dose. Ocera believes, therefore, that some patients in the Phase II trial had insufficient doses and Mallinckrodt appears to agree.

The companies are working to determine the optimal dosing regimen before beginning a Phase III study, and Mallinckrodt is continuing to speak with FDA regarding a regulatory pathway to approval. They hope to have an intravenous formulation of OCR-002 on the market by 2022 and an oral formulation by 2024. The drug is also being evaluated in patients with cirrhosis as a chronic use option to maintain remission of hepatic encephalopathy in a Phase IIa study, with results expected by the end of 2017. The companies estimate the US market potential for OCR-002 to be $5 to $7 billion with $2 to $3 billion in acute treatment and $3 to $4 billion for recurrent incidents.

“We believe OCR-002 has the potential to help thousands of patients whose hepatic encephalopathy is insufficiently treated by current therapies,” stated Ocera President and CEO Linda S. Grais, M.D. “We're excited by the additional development capability and commercial reach that can be gained by becoming part of Mallinckrodt. With this focus, I'm confident this important treatment can be successfully brought to market.” The acquisition is expected to close in the fourth quarter of 2017.