Gilead Sciences Inc. is paying Korean firm LG Life Sciences Ltd. $20 million up front for rights to a caspase inhibitor program for fibrotic diseases, which includes a Phase II-stage compound being tested in patients with hepatitis C virus.

LGLS, based in Seoul, Korea, has been developing LB84451, an oral, once-daily, pan-caspase inhibitor, and other caspase inhibitors, which might have potential to stop the progression of fibrosis in the liver due to chronic hepatitis infections, as well as pulmonary fibrotic diseases.

Caspases, which are described as cellular proteases that are involved in processes such as apoptosis and inflammation "are a novel field of scientific research," said Nathan Kaiser, spokesman for Foster City, Calif.-based Gilead, which saw LGLS's caspase inhibitor program as a strategic fit.

"It aligns well with our interests in liver and our emerging focus on pulmonary diseases," he told BioWorld Today. On the liver side, Gilead markets Hepsera (adefovir dipivoxil) for hepatitis B virus (HBV) infection and, earlier this year, reported promising top-line Phase III data for Viread (tenofovir disoproxil fumarate) in HBV patients.

The company also is investigating non-nucleoside HCV polymerase inhibitors for hepatitis C virus. And last year, Gilead got a big boost to its pulmonary pipeline, with the acquisitions of Denver-based Myogen Inc. and Seattle-based Corus Pharma Inc.

Those deals brought late-stage drugs ambrisentan for peripheral arterial hypertension and aztreonam lysine for cystic fibrosis, respectively. (See BioWorld Today, July 21, 2006, and Oct. 3, 2006.)

Prior to its deal with Gilead, LGLS initiated Phase IIa testing of LB84451, looking for safety, tolerability, pharmacokinetic and efficacy data.

That study is expected "to be completed in the first half of 2008," Kaiser said, after which Gilead will determine the next steps. Besides HCV, the caspase inhibitor program could be explored in nonalcoholic steatohepatitis and idiopathic pulmonary fibrosis.

As development progresses, LGLS could receive up to $182 million in milestone payments, and would be entitled to an undisclosed royalty rate on product sales.

LGLS also retains rights to the caspase program in Korea, China and India, and holds worldwide rights to develop the program in ophthalmic and topical uses.

The Gilead deal is LGLS's second large collaboration this year. In March, the firm partnered with Osaka, Japan-based Takeda Pharmaceutical Co. Ltd. to develop obesity drugs based on LGLS' obesity program. In that deal, Takeda gained exclusive rights to compounds for worldwide commercialization, except Korea and Vietnam, with a semi-exclusive right in India, in exchange for up-front and research payments, as well as milestones, that potentially could exceed $100 million.

Gilead, which reported third-quarter earnings last month, posting a net income of $398.3 million, or 42 cents per share, revised its 2007 financial guidance to account for the $20 million payment to LGLS. It now expects R&D expenses for the year to fall between $510 million and $520 million, up from the previous guidance of $490 million to $500 million. The company ended the third quarter with about $2.2 billion in cash. (See BioWorld Today, Oct. 22, 2007.)

Gilead's shares (NASDAQ:GILD) closed at $44.62 Wednesday, down $2.49.