An agreement to partner its Hedgehog compounds could garner more than $170 million for Curis Inc., which licensed its preclinical-stage proteins and small molecules to Wyeth Pharmaceuticals.

The agreement initially centers on neurological applications of the Hedgehog proteins and Hedgehog pathway agonists. Down the road, Wyeth will have an option to acquire rights to other applications of the products as well.

In return, Cambridge, Mass.-based Curis received an undisclosed license fee in cash and equity, and is guaranteed at least two years worth of funding to support research dedicated to the program. In addition, Curis could receive additional cash payments to be triggered by clinical development and regulatory approval milestones. Should any products reach the market, Madison, N.J.-based Wyeth agreed to pay a royalty that would increase in proportion with escalating sales.

"We have expertise in these signaling pathways and preclinical mechanism-of-action studies," Curis President and CEO Daniel Passeri told BioWorld Today, speaking from the JPMorgan Healthcare Conference in San Francisco. "But it's pretty clear that with a set of disease indications as complex as neurological disorders, you need some muscle beyond that, some world-class clinical expertise in terms of designing clinical trials and defining lead candidates."

He said the company conducted parallel negotiations with other potential partners, but Wyeth stood out for a couple of reasons.

"They clearly understand that the Hedgehog pathway represents a potential platform for treating several neurological disorders, including Parkinson's disease, stroke, neuroprotection and diabetic neuropathy," Passeri said, adding that the full spectrum of neurological disease indications are of interest in the partnership. "We felt that philosophically, they were an extremely good match, and we were very impressed with the insight and vision of the head of the neurology group."

Absent any royalty payments, the deal could total more than $170 million if at least two products are successfully developed. Nearer term, Curis will continue to augment its preclinical work in terms of further elucidating the compounds' mechanisms of action.

The signaling pathway's biological properties include the promotion of nerve tissue healing. The small-molecule agonists, which are orally available compounds that can cross the blood-brain barrier, have demonstrated therapeutic efficacy in several models of neurological disease, including Parkinson's disease and stroke.

"We'll work closely with Wyeth's scientists to implement a research and development plan," Passeri said, "with the objective of defining lead candidates and filing [investigational new drug applications]."

He said it remains too early to forecast a timeline for those activities.

Curis retained development and licensing options for certain therapeutic applications of the Hedgehog activator technologies, including those that qualify as orphan drug indications, topical use for hair growth, local delivery applications for cardiovascular disease and use of the technology with stem cells. Wyeth has an option to acquire the orphan drug indications and the cardiovascular applications, pending certain success criteria.

"The key criteria are for us to present them with mechanism-of-action and proof-of-principal data in animal models," Passeri said. "That would compel them to take it forward for an IND filing."

Beyond the two programs to which Wyeth retains its option, Curis will continue to explore the use of its Hedgehog technology for hair-growth regulation. Passeri said the company's objective is to identify a lead candidate later this year, followed by potentially filing an IND. Also this year, he added, Curis will look to acquire and in-license other signaling pathway technologies.

The company's stock (NASDAQ:CRIS) spiked 12.9 percent Tuesday, a 67-cent gain to close at $5.86.

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