Delta Health Products Development Corp., a kind of brokeragefirm for drugs in development, "won't have a bunch of people inwhite lab coats."

"We buy something, add a little value to it, and go on to thenext product," said W. Preston Hutchings, Delta's chieffinancial officer.

Delta was formed last month by Pharmaquest Corp., whichcontributed a stable of potential products to the venture. Someare drugs already sold in Europe that have only a few years lefton their patents. San Rafael, Calif.-based Pharmaquest wasfounded about 16 years ago to help European drug companiesgain U.S. marketing approval, said Hutchings.

Delta, located in Mill Valley, Calif., also will develop already-approved drugs for additional indications.

"One of the beauties of the company is we'll never need a bigstaff because the focus here is financial," said Hutchings."This is very much of an intellectual exercise. We're nottalking about the nuts and bolts of developing a drug. We won'thave a bunch of people in white lab coats."

What Delta's products have in common is limited safetyconcerns, which should speed low-cost development and makeit possible to sell the drug to another company at an attractiveprice, even with limited patent life. The development work forPhase I and II trials will be contracted out, mainly toPharmaquest.

Delta isn't targeting any specific technology or disease. "We'refocusing not on the type of drug, but on the amount of money itcosts and the time it would take to be developed," Hutchingssaid.

Delta plans, at least initially, to develop most of its productsin conjunction with corporate partners, though the companywill develop a few drugs itself.

Any promising drugs will be sold or licensed for Phase IIIdevelopment and commercialization. In a few cases, a newcompany might be formed around a product or group ofproducts, said Hutchings.

Delta has received enough seed funding for 12 months fromPresidio Venture Fund II, TZM, the company's five directors andseveral individuals. Delta is looking for a maximum of $2million in additional funding.

The company plans to finance most of its drug developmentthrough corporate partnerships to avoid diluting the equity ofthe original investors.

Leon Freeman, founder and chief executive officer ofPharmaquest, will serve as chairman of Delta. Pharmaquestwas instrumental in founding Oclassen Pharmaceuticals Inc.,which licenses and develops drugs for dermatological andsexually transmitted diseases, and Cholestech Corp., whichdevelops drugs and diagnostics for lipid disorders.

-- Karen Bernstein BioWorld Staff

(c) 1997 American Health Consultants. All rights reserved.