Staff Writer

ViroPharma Inc. said Wednesday that it extended by up to two years the screening phase of its hepatitis C drug discovery, development and commercialization agreement with Wyeth Inc.

The companies will continue to split costs evenly for research and development work that is being conducted at both companies, said Marc Collett, vice president of discovery research and a co-founder of Exton, Pa.-based ViroPharma.

"We are expanding and extending our drug discovery efforts," Collett said, explaining that there is "no agreement change whatsoever" and that it is a "true pooling of resources."

The agreement thus far has resulted in one candidate, VP50406, entering the clinic, but the companies ultimately decided to halt studies on that compound, he said.

"The results we saw with VP50406 were not robust enough to warrant further study of this compound," said Bryan de Castro, manager of corporate communications at ViroPharma.

However, the companies are preparing to enter the clinic later this year with another drug candidate to fight hepatitis C. The candidate is "one that arises from a series of compounds that are closely related," Collett said.

"We are always developing the backup compounds if we run into any issue that could [present a problem]," Collett said.

The companies have been working together for three years, since the original agreement was entered between ViroPharma and Wyeth-Ayerst Laboratories in December 1999. At the time, Wyeth-Ayerst was part of American Home Products Corp., of Madison, N.J., which since has been renamed Wyeth.

The original agreement included a $5 million up-front payment to ViroPharma, as well as milestones, royalties and research and development support. Also, the deal stipulated ViroPharma and Wyeth would co-promote any resulting HCV products in the U.S. and Canada, sharing equally in profits. In other countries, Wyeth would promote the products and pay ViroPharma double-digit royalties on sales. (See BioWorld Today, Dec. 14, 1999.)

"Hepatitis C is a very important disease for which improvements in medical treatments are very urgently needed," Collett said. "Both [companies] are motivated [by that]."

In May, ViroPharma received a "not approvable" letter from the FDA stating that the agency would not give regulatory clearance for ViroPharma's cold medicine candidate, Picovir. ViroPharma's stock fell sharply on the news, dropping 92 cents, or 21.7 percent, to close at $3.33. The company was to have an opportunity to meet with the FDA concerning Picovir. (See BioWorld Today, May 13, 2002.)

Collett said Wednesday that he could not comment on Picovir or any discussions with the FDA.

ViroPharma's stock (NASDAQ:VPHM) rose 3 cents Wednesday to close at $1.29.