By Karen Pihl-Carey

Staff Writer

AtheroGenics Inc. partnered its lead compound, AGI-1067, and related products with Schering-Plough Corp. in a deal potentially worth $189 million.

Under terms of the collaboration, Madison, N.J.-based Schering-Plough assumes development costs and receives worldwide rights to develop, manufacture and market AGI-1067 to treat and prevent restenosis in patients following percutaneous coronary intervention (PCI). Schering-Plough also gains rights to the drug for all indications, as well as other agents in a library of vascular protectant compounds.

The company will pay an up-front license fee to AtheroGenics, as well as development milestones and milestones upon reaching certain worldwide net sales revenues. AtheroGenics also will receive royalties on sales of any products that come out of the collaboration. Not including the royalties, the deal could mean as much as $189 million for AtheroGenics.

"This is the first major deal for our company," said Russell Medford, president and CEO of Atlanta-based AtheroGenics, a private company formed in 1994. "We're very excited and very happy."

Due to an agreement with Schering-Plough, Medford would not break down the figure as to how much AtheroGenics might receive prior to an FDA approval or give any further details about the financial structure of the deal, including the royalty percentage.

"I can't break it down ... I can't divulge the percent," he told BioWorld Today. "But for us this is a significant deal for both the short term and in the long term."

Together, the companies will develop AGI-1067 for the post-PCI restenosis indication. Restenosis is the reoccurrence of constriction or narrowing of the coronary arteries. PCI comprises balloon angioplasty, atherectomy and stent replacement.

AGI-1067 is the first in a new class of oral compounds called composite vascular protectants (v-protectants), which in preclinical models blocked the onset and progression of atherosclerosis, or the buildup of plaque on arterial walls, and have lowered serum cholesterol levels. The v-protectant technology also may be beneficial to asthma, arthritis, vasculitis and cancer, the company said. After completing seven Phase I safety trials, AGI-1067 is currently in a Phase II trial, known as the Canadian Antioxidant Restenosis Trial (CART-1). The controlled, dose-ranging study is being conducted at five sites in Canada with more than 300 patients. AtheroGenics will continue to manage and oversee the clinical program.

"We anticipate that it will give us an initial indication of AGI-1067 and we would expect, based on timelines, we would have potential results by early 2001," Medford said.

The PCI procedure is done about 1 million times worldwide each year, Medford said, giving AGI-1067 its market for the post-PCI restenosis indication. A second market for the product could be for patients needing cholesterol-lowering drug therapy. According to the American Heart Association, more than 21 million Americans need such therapy, but only one-third of them receive it.

In its collaboration with AtheroGenics, Schering-Plough receives rights to all indications of AGI-1067, although the companies will initially concentrate on restenosis, Medford said.

Aside from its lead compound, AtheroGenics is developing a diagnostic test that detects active atherosclerosis, as well as products to impose growth control on cancer cells.