Adolor Corp.'s beleaguered shares got a 20 percent boost on Wednesday after the company announced a $265 million deal with Pfizer Inc. for the delta opioid agonists ADL5859 and ADL5747.

RBC Capital Markets analyst Michael Yee called the deal "attractive" in terms of both its $31.9 million up-front and $232.5 million milestone components.

Exton, Pa.-based Adolor will receive a $30 million up-front payment as well as $1.9 million for expenses associated with initial Phase IIa trials of ADL5859. Potential milestone payments associated with ADL5859 could total $155 million, with another $77.5 million tied to milestones for ADL5747. The first milestone would be due upon Pfizer's initiation of Phase IIb trials for ADL5859, and more than 50 percent of the milestones are payable prior to regulatory approval of each compound.

Moving forward, the companies will form a joint steering committee to manage development and commercialization, with Adolor taking the lead through Phase IIa and Pfizer handling subsequent work. Adolor retains the option to co-promote in the U.S., and the companies will split U.S. development costs and revenues 60/40, with Pfizer taking the larger percent in both cases.

Outside of the U.S., Pfizer will fund worldwide development and commercialization and pay Adolor sales-based royalties.

During a conference call, Adolor President and CEO Michael Dougherty noted that the deal is "adaptive and flexible to potentially add additional compounds and indications."

For now, the deal centers on ADL5859 and ADL5747, both delta opioid receptor agonists for the treatment of inflammatory, neuropathic and acute pain.

ADL5859 generally was well tolerated in Phase I trials, and Adolor initiated Phase IIa trials earlier this year for postoperative dental pain and pain associated with rheumatoid arthritis.

Data from the dental pain trial are expected in early 2008, and Adolor plans to initiate additional Phase IIa trials in pain associated with diabetic peripheral neuropathy and osteoarthritis.

ADL5747 is slated to enter the clinic in the first quarter of 2008.

The opioid agonist market is dominated by drugs targeting the mu opioid receptor; the FDA has not approved any drugs selective for the other two receptors, delta and kappa. Yet mu opioid agonists, such as morphine, oxycodone and fentanyl, are associated with well-known side effects including addiction, respiratory depression, gastrointestinal complications and neurological effects.

Adolor expects its delta agonists to avoid some of these side effects, but Yee said the program is early stage and he is "awaiting the data to get more bullish."

Jonathan Aschoff, analyst with Brean Murray, Carret & Co., said he is "neutral to negative" on the delta agonist program and doesn't expect rapid progress.

Dougherty said Pfizer shares Adolor's vision for the program as "a new class of products for the treatment of pain."

Pfizer certainly has plenty of experience with pain drugs. The company markets Celebrex (celecoxib) for acute and inflammatory pain, Lyrica (pregabalin) for neuropathic pain and Neurontin (gabapentin) for post-herpetic neuralgia.

Pfizer also has grown its pain pipeline this year through a $1 billion-plus deal with Icagen Inc. for sodium ion channel modulators and a $195 million deal with Hydra Biosciences Inc. for TRPV3 antagonists. In previous years, the big pharma gained pain programs through the acquisition of Rinat Neuroscience Corp. and a deal with Renovis Inc. (See BioWorld Today, June 1, 2005, Apr. 10, 2006, July 27, 2007, and Aug. 15, 2007.)

For its part, Adolor wasn't starved for the cash the Pfizer deal will bring. The biotech reported $147.5 million in cash, equivalents and short-term investments as of Sept. 30, and its burn rate recently has run about $11 million per quarter. Dougherty hinted that some of the superfluous cash may soon go to support new programs emerging from Adolor's pipeline.

For now, Adolor's only other product in the clinic is the peripherally acting mu opioid receptor antagonist Entereg (alvimopan). The drug is designed to block the gastrointestinal side effects of opioid analgesics, but its development has been fraught with setbacks.

Adolor and partner GlaxoSmithKline plc initially filed a new drug application in 2004 for Entereg in postoperative ileus (POI), but two out of three trials of the drug in opioid-induced bowel dysfunction (OBD) missed their endpoints, and an interim analysis from a fourth trial raised concerns about cardiovascular adverse events.

The FDA issued an approvable letter in POI asking for more safety data, and trials in OBD were later halted. (See BioWorld Today, Sept. 6, 2006, Nov. 7, 2006, and April 11, 2007.)

Adolor and GSK have continued to push forward in POI, and their revised NDA is set to be reviewed by the Gastrointestinal Drugs Advisory Committee Jan. 23, prior to its action date of Feb. 10. Both Yee and Aschoff were pessimistic about the drug's prospects.

Setbacks with Entereg have cut Adolor's share price from about $25 in mid-2006 to less than $4 in mid-2007.

The shares (NASDAQ:ADLR) rose 73 cents to close at $4.48 on Wednesday.

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