By Karen Pihl-Carey

Staff Writer

As part of a collaboration with Emisphere Technologies Inc. begun two years ago, Novartis Pharma AG acquired an exclusive license to develop and commercialize an oral formulation of the osteoporosis drug calcitonin.

A nasal and injectable form of Novartis' calcitonin is already on the market. The oral form was developed using Emisphere technologies.

Emisphere's stock (NASDAQ:EMIS) climbed 16.49 percent Thursday to close at $67.125, up $9.50.

In December 1997, the two companies entered into a $35 million collaboration to develop an oral formulation of two large-molecule Novartis compounds. Calcitonin, the first one, just completed a Phase I trial in the UK. The second compound is yet to be determined, said Charles Abdalian, chief financial officer of Tarrytown, N.Y.-based Emisphere.

"We believe our oral calcitonin is the first time that a large protein, a macromolecule, has been delivered orally without modifying the drug itself or the membrane that it passes through," Abdalian told BioWorld Today. "Our technology actually emulates nature's transport, as you will, so we don't damage the drug, so the drug is the pure drug, nor do we damage the membrane."

Under terms of the agreement under which Novartis, of Basel, Switzerland, receives exclusive worldwide rights to oral salmon calcitonin, Emisphere will receive royalties on product sales, an up-front fee and potential milestone payments. Novartis will cover clinical development, marketing and commercialization. Aside from the royalties, the money to be paid is part of the $35 million originally agreed upon in the collaboration formed two years ago. (See BioWorld Today, Dec. 5, 1997, p. 1.)

The royalties are part of a tiered structure, Abdalian said. Financial specifics were not disclosed.

Emisphere is a company that specializes in the oral delivery of therapeutic macromolecules and other compounds. The company's oral liquid heparin formulation to prevent deep-vein thrombosis is in Phase III trials at sites in the U.S., Canada and the UK, and could be the subject of a new drug application in the third or fourth quarter of 2001. The company hopes to launch the product early in 2002.

Novartis and Emisphere are meeting to discuss how to proceed with clinical development of oral calcitonin. The Phase I study indicated that therapeutic blood levels of salmon calcitonin were achieved using the solid dosage formulation. The study tested the product for safety, tolerability and pharmacokinetics in healthy subjects.

Annual worldwide sales of salmon calcitonin are estimated to be in excess of $800 million, and Emisphere believes an oral form would take a large share of those sales.

"The nasal administration dries out the nose, so there's discomfort associated with it, and as you know, the more discomfort you have with a regimen, the less compliance you have with that regimen," Abdalian said. "So you expand the market by improving compliance."

Salmon calcitonin is a synthetic version of a natural hormone that inhibits bone resorption, which is used to treat osteoporosis. The disease affects more than 28 million people in the U.S. and more than 200 million worldwide.

Aside from its collaboration with Novartis, Emisphere also has a partnership with Eli Lilly and Co., of Indianapolis, to develop oral forms of two endocrine proteins. (See BioWorld Today, Feb. 28, 1997, p. 1.)

Earlier this week, Emisphere also filed for a public offering of 2.5 million shares in hopes of raising net proceeds of $129.5 million. The proceeds will go toward funding the Phase III program for liquid oral heparin, preclinical programs and for general corporate purposes.