Vertex Pharmaceuticals Inc. is receiving $21 million as part of an expanded partnership to develop therapeutics for cystic fibrosis.

Cystic Fibrosis Foundation Therapeutics Inc. (CFFT), the nonprofit drug discovery and development affiliate of the Cystic Fibrosis Foundation, will make contracted research payments over the next two years to fund the Cambridge, Mass.-based company's continued cystic fibrosis drug discovery efforts. Vertex said recent progress in designing small-molecule drugs targeting the disease's basic defect provides the foundation for the new agreement.

"I think it reflects the progress we've made based on the integrated drug discovery effort we've undertaken since the time of our merger [with Aurora Biosciences Corp.]," Michael Partridge, Vertex's director of corporate communications, told BioWorld Today. In July 2001, Vertex acquired San Diego-based Aurora, with which the Bethesda, Md.-based foundation originally entered the collaboration in May 2000.

Vertex, which retains the right to develop and commercialize resulting compounds, has focused on designing selective ion channel modulators that could restore function in a defect of the cystic fibrosis transmembrane conductance regulator (CFTR) protein. That defective channel affects the transport of sodium and chloride in and out of the cells, which leads to the thick mucus in the lungs and pancreas.

"In cystic fibrosis, there's an ability to develop very robust, high-content cell assays that enable precise measurement of a compound's ability to modulate specific ion channels and specific pathways," Partridge said. "That's a capability that's been developed, and it's enabled the identification of compounds that are really the first of their kind."

Drug discovery efforts under the expanded collaboration will focus on optimizing and selecting drug candidates for clinical development from one or two compound classes that have been shown to possibly reverse the effects of the defective ion channel via two separate mechanisms of action. One class of compounds acts as potentiators, directly increasing the gating ability of the defective ion channel, while a second class acts as correctors to enhance the number of CFTR channels at the cell surface. Both classes of compounds have been shown to improve CFTR function in bronchial epithelial cells that have been isolated from cystic fibrosis patients.

Partridge noted that neither class could be characterized as further along in development, adding that additional research will help elucidate a primary approach to progress under the agreement.

"There's more work to be done, and I think that's reflected in the significant research funding that's being provided," he said. "But certainly the research that we have done and the compounds we have are providing the foundation for moving ahead."

Vertex will receive a milestone payment for advancing the first compound into the clinic. Should any products move into the market, CFFT would receive an unspecified financial return as well.

The company expects to recognize about $7 million as revenue from the collaboration this year. In the quarter ended March 31, the company realized $17.5 million in royalties and collaborative revenue through other partnerships. Through that date, it had about $520.6 million of cash, cash equivalents and available-for-sale securities. Vertex recorded a $40.4 million net loss in the first quarter.

Vertex said its scientists would discuss progress in the program at CFFT's Williamsburg conference next month in Virginia. The company noted that drug candidates identified in the program also might have broader applications in treating pulmonary diseases.

"Depending on the biological effects that are able to be measured in the clinic," Partridge said, "there's the potential for them to be applied to other diseases."

Elsewhere in the company's pipeline are two clinical candidates for hepatitis C, merimepodib and VX-950. The former will move into a Phase IIb study in the second half of this year, with the latter advancing to Phase I later this year, as well. Vertex plans to move a product for inflammatory diseases, VX-765, into Phase II in the second half of this year. An oncology product, VX-680, is expected to advance with an as yet undetermined partner under an already approved investigational new drug application. Another oncology product, VX-944, is in Phase I. Ion channel modulators and kinase inhibitors are in late-stage discovery programs at Vertex.

The company also is involved in the co-promotion of two commercialized HIV products for which it receives royalties - Lexiva (fosamprenavir calcium) and Agenerase (amprenavir). They are partnered with London-based GlaxoSmithKline plc. Partridge said European approval of Lexiva is expected around the middle of this year. The product will be labeled Telzir in Europe.

On Monday, Vertex's stock (NASDAQ:VRTX) gained 10 cents to close at $8.79.