Regeneron obesity study bolstered by $15 million

BBI Newsletter, The, Nov, 1997

Research by Regeneron Pharmaceuticals (Terry-town, New York) into the relationship between Leptin, a protein secreted by fat cells, and its role in signaling the brain's demand for food, is getting continued fund-ing from Procter & Gamble (Cincinnati, Ohio). The product of nearly 10 years of study, the research could eventually produce a drug to fight obesity related to Type II diabetes.

Procter & Gamble has pledged $15 million to Regeneron and made an up-front payment of $2.5 million to develop the drug that could offer enor-mous therapeutic and market potential. Another $2.5 million in payments is promised to Regeneron by the end of the year. More money will be paid in the form of milestones to Regeneron as it develops ciliary neurotrophic factor (CNTF) and Axokine, a patented, second-generation CNTF, for weight reduction. Ironically, earlier work on CNTF represented a setback since Regeneron was studying it for use against amyotrophic lateral sclerosis but found that the primary endpoint -- improved mus-cle strength -- was not met. However, the researchers observed that patients injected with CNTF lost weight. Later, experiments with mice showed that CNTF was effective in encouraging weight loss, perhaps by bind-ing to the hypothalamus' receptor and stimulating the signaling pathways that suppress food intake. Regeneron has shown in preclinical experiments that obesity and diabetes may result from a deficiency of leptin or from the dysfunction of the receptor that recognizes it. Another company, Amgen (Thousand Oaks, California), also is reportedly conducting clinical trials with leptin for obesity and Type II diabetes. SIMS in infusion pump acquisition Smiths Industries Medical Systems (SIMS; London) will acquire Graseby (Cambridge, England) at an agreed bid price of $216 million. Both companies produce infusion pumps and patient monitoring equip-ment but to a significant extent their product lines are complementary. SIMS Deltec (St. Paul, Minnesota) is strongest in ambulatory infusion pumps and intra-venous access ports, while Graseby has concentrated on volumetric pumps which handle higher infusion volumes mostly used in hospitals. Since SIMS is a significant producer of surgical dis-posables like syringes through its Portex (Hythe, England) subsidiary, Graseby will benefit significantly from in-group sourcing of products previously bought from third party suppliers. Geographically the deal is a good fit, with Deltec being strongest in the U.S. and Graseby having most of its sales in Europe and Japan. Ion implantation agreement North American Scientific (NASI; North Hollywood, California) and RadioMed (Burlington, Massachusetts) have agreed to combine their propri-etary technologies to create the first commercial opera-tion for ion implantation of radioisotopes in the U.S. Pursuant to the agreement, NASI made a $500,000 investment in RadioMed in the form of a note convert-ible into a significant minority position in RadioMed's outstanding common stock. Fund takes 5% stake in NeoRx Bay City Capital LLC has acquired about 5% of the outstanding common shares of NeoRx Corp. (Seattle, Washington), developer of products to treat cancer and cardiovascular disease. The shares were purchased for the Bay City Capital Fund LLP, a new banking and management advisory partnership formed by The Craves Group and the Pritzker Family business inter-ests. Fred Craves, PhD, the founding partner of The Craves Group, is chairman of the NeoRx board of directors. The fund purchased 1,010,000 shares of NeoRx stock on the open market between Aug. 13 and Aug. 21 at prices between $4.84 and $5.06. Products in development at NeoRx include Biostent, a combination drug/device aimed at preven-tion of restenosis after angioplasty, and Avicidin, a can-cer therapy. Advanced Tissue wins $2 million grant Advanced Tissue Sciences (La Jolla, California) has been awarded a $2 million grant from the Advanced Technology Program of the National Insti-tute of Standards and Technology. The company will lead a multi-disciplinary effort to design, construct and evaluate tissue-engineered vascular grafts produced from cells grown on a biocompatible scaffold. For the three-year grant period, it will collaborate with the University of California, San Diego. Nanogen, Becton, Dickinson team up Nanogen (San Diego, California) and Becton Dickinson and Co. (Franklin Lakes, New Jersey) have formed a joint venture to develop test systems in the field of in vitro nucleic acid-based diagnostic and mon-itoring technologies. The test systems will be based on Nanogen's DNA microchip and instrumentation tech-nology and Becton Dickinson's system for DNA ampli-fication. Funding and equity components of the joint venture reportedly could total more than $55 million. Hospital services MBO Two of Europe's major venture capital groups, Quadrigo Capital Management and SBC Equity Partners, have bought a majority stake of around $170 million in NWG (Duisberg, Germany), a German hos-pital services provider with annual revenues of $350 million. NWG's present management has also invested in the buyout, which is one of Germany's largest man-agement buyouts this year. Aradigm inhaler deal potentially $40 million Just as asthmatics often depend on life-giving inhalers to breath, pain sufferers may also soon be able to use similar devices -- with this particular version deliv-ering morphine sulfate electronically. To further develop this electronically activated type of inhaler device, Aradigm (Hayward, California) is getting $9 million up front from SmithKline Beecham plc (SKB; London), which also will buy $5 million in equity at a 25% premi-um to Aradigm's recent market price. Together with mile-stone payments made to Aradigm for development of other opiates and opioids for pulmonary delivery, the deal could eventually be worth up to $40 million. The SKB funding will be used to develop Aradigm's AERx pain management system, a hand-held device that electronically measures the flow rate of morphine from liquid drug packets, and uses display lights to aid in its operation: Ared light tells the user to breathe more slow-ly; a green light indicates the need to breathe faster; and if the flow rate is not appropriate, the device shuts down. Another feature of the device is that it keeps track of dosing, according to Richard Thompson, president and CEO of Aradigm. He explains that if a dose is sought too soon after a previous dose, the programmable device will not provide it. The patient also wears an electronic bracelet, swiping it across the device before each session. "That will tell the inhaler that the right person is asking for the drug," Thompson said. "Also, you get a complete electronic record of everything that goes on, which can be downloaded to [a physician's] personal computer." The company also is working to develop the AERx system for delivering insulin to diabetics, based on the results of three trials, with its advantages being that it is both non-invasive and faster-acting than injected insulin. Inspire seeks cystic fibrosis therapy In an another effort at developing new respiratory therapies -- and one especially targeted to cystic fibro-sis -- a group of University of North Carolina (UNC; Chapel Hill, North Carolina) researchers has been developing a compound called uridine triphosphate (UTP), which provides an aerosol pulmonary route to keep secretions in the lungs normal - that is, thin and watery and hydrated, according to Richard Boucher, director of the Pulmonary Division and of the Cystic Fibrosis Research and Pulmonary Treatment Center, both at UNC. As a result of the researchers' work in the early 1990s, Inspire Pharmaceuticals (Durham, North Carolina) was developed in 1995. The company has grown to 20 employ-ees and guided its lead UTP-based drug candidate, INS316, to the Phase II clinical trial level. Inspire recent-ly raised $13 million to fund drug development. To date, company officials say they have raised $22.2 million. This drug also is delivered via an inhaler. While it has been carried through a Phase II trial, Inspire offi-cials are not revealing results because of a pending patent application. Reports of the Phase II trial are pre-dicted for the second half of 1998, and the company also said it plans to submit an investigational new drug application for a second-generation compound, INS365, in the first quarter of next year. The company is hoping that the drug's main func-tion will be to stall the pulmonary complications of cys-tic fibrosis, especially in the early pediatric stages. Early data indicate the drug increases the rate of mucociliary clearance in normal subjects, that is the natural process which keeps surfaces of the lungs free of inhaled parti-cles, harmful microorganisms and excessive secretions. Aastrom wins two innovation grants Aastrom Biosciences (Ann Arbor, Michigan) has received two Small Business Innovation Research grants totaling $460,000, from the National Institutes of Health. One grant, from the National Heart, Lung and Blood Institute, will fund studies in the therapeu-tic uses of stem cells derived from umbilical cord blood; the other will explore a suicide gene therapy for AIDS in which patients' healthy cells would die when infect-ed with HIV, preventing the virus from replicating. Ligand, Allergan dissolve joint venture Ligand Pharmaceuticals (San Diego, California) is dissolving a joint venture with Allergan (Irvine, California) by paying $74.1 million for all sales rights to Allergan's promising drugs for cancer, leukemia and dia-betes. Ligand will acquire from Allergan 3.25 million out-standing shares of their joint venture, Allergan Ligand Retinoid Therapeutics, the company established in 1994. Of the $74.1 million to be paid to Allergan when the deal is concluded (scheduled for Nov. 3), at least $25 million will be paid in cash and no more than $64.4 mil-lion in shares. In June 1995, shareholders paid $10 per share for stock in the joint venture company. In the buy-out, they will get the equivalent of $21.97 per share. Helicobacter joint marketing deal extended Cortecs (Isleworth, England) which produces the Helisal One Step Helicobacter pylori saliva test, has extend-ed its joint promotional deal with Astra (Sodertalje, Sweden) beyond Europe. Astra, which makes the block-buster anti-ulcer drug Losec (omeprazole), will publicize the Cortecs test at gastrointestinal meetings and in med-ical education programs in 33 countries. Implant company to list on French 2nd market Fournitures Hospitalieres (Paris) is planning to list on the French Deuxieme Marche (2nd Market, like NASDAQ) by floating up to 20% of its capital. Fournitures Hospitalieres produces prostheses and surgical implants as well as operating theater lighting and equipment. Its 1996 sales were $42 million.