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Human Genome Sciences' three-year collaboration with Swiss pharma giant Novartis is paying off with a new $75 million milestone payment, part of a package that could total $507.5 million for developing and commercializing a new treatment for chronic hepatitis C — known as a "viral time bomb."

The $75 million payment from Novartis relates to the successful completion of the phase 3 development program and decision to apply for regulatory permission to market the liver disease treatment, called Zalbin in the U.S. and Joulferon in the rest of the world.

The companies plan to submit marketing authorization applications with the Food and Drug Administration and European regulators this quarter.

"We are pleased with the progress of this program and look forward to continuing to work closely with Novartis to advance Zalbin to the market," said H. Thomas Watkins, CEO of Rockville's Human Genome Sciences, in a statement. "Assuming licensure by the FDA and other regulatory agencies, HGS believes Zalbin could become a market-leading treatment for chronic hepatitis C."

Under their 2006 agreement, the companies will co-commercialize the treatment — formerly called Albuferon — in the U.S. and will equally share clinical development costs, U.S. commercialization costs and U.S. profits. Novartis will be responsible for commercializing the treatment elsewhere in the world, and will have responsibility for commercial manufacturing of the finished product.

Total payments to HGS, including $132.5 million previously paid, could total $507.5 million.

The drug is made by genetically fusing human albumin, the body's most prevalent blood protein, with interferon alfa, using HGS's proprietary technology. According to HGS, the fusion prolongs the half-life of the therapeutic proteins.

Results from two phase 3 trials showed that Zalbin worked as well as Roche's Pegasys treatment for chronic hepatitis C with only half the injections administered. Rates of side effects were also comparable, according to HGS.

It's a potentially lucrative market for HGS and Novartis. In the first half of the year, Roche reported sales of Pegasys for hepatitis B and C rose 10 percent over last year to $829.9 million.

Hepatitis C is a viral liver disease that usually becomes a chronic condition that can result in cirrhosis of the liver and liver cancer, according to the federal Centers for Disease Control and Prevention. It is spread through contact with infected blood, primarily through sharing hypodermic needles. There is no vaccine for it. About 4.1 million Americans either have an ongoing infection or previously had one, according to the National Institutes of Health, with about 11,000 Americans dying from it annually.

The World Health Organization reports that hepatitis C has been compared to a "viral time bomb." Worldwide, about 180 million people are infected; upward of 4 million people are infected annually. Hepatitis C is responsible for 50 percent to 75 percent of all liver cancer cases, and two-thirds of all liver transplants in the developed world.

Lupus treatment advances

HGS also announced that Benlysta, the lupus treatment it is developing with GlaxoSmithKline of London, showed positive results in the first of two phase 3 trials.

Pending results of the second trial, which are to be announced Monday, the companies plan to submit marketing applications for the treatment in the U.S., Europe and elsewhere in the first half of 2010.

No new treatment for lupus has been approved by regulators in more than 50 years, according to HGS.

This report originally appeared in The Business Gazette.