BioWorld International Correspondent

Swiss biopharmaceutical firm Actelion Ltd. added $10 million to its cash pile, on the strength of an exclusive alliance with Merck & Co. Inc. in the area of oral renin inhibitors.

The Allschwil-based firm could earn up to $262 million more, through research, development and approval milestones, should one product from the program reach commercialization. It would gain further undisclosed milestones should additional products obtain regulatory approval. The company also said it would derive "substantial" sales royalties on all marketed products.

The deal, CEO Jean-Paul Clozel said in a conference call last week, "for the first time provides external validation of Actelion's focus on breakthrough discoveries in the area of small molecules."

The program is at an advanced stage of lead selection, and the companies will jointly fund further preclinical development and clinical development through Phase II trials. If those are successful, then Merck, of Whitehouse Station, N.J., would fund pivotal Phase III studies and also would lead and fund commercialization activities. Actelion has negotiated an option to obtain global co-promotion rights to any product emerging from the alliance, and its costs would be reimbursed by Merck.

"The idea is that Actelion can build a substantially larger sales force than otherwise possible, which is then capable of marketing additional Actelion drugs," company spokesman Peter Engel told BioWorld International. The companies have not disclosed the precise terms under which Actelion can avail itself of that option, but the contract mechanism has "substantial flexibility" built in, he added.

"It's a very attractive deal for a preclinical compound," said Genghis Lloyd-Harris, a London-based analyst at Credit Suisse First Boston. He highlighted the global aspect of the co-promotion element of the deal. Many other such co-promotion agreements between big pharma and biotechnology firms are regional in scope. "To some extent, it reflects the negotiation leverage of Actelion," he said.

Oral renin inhibitors are a new drug class in development for treatment of hypertension, renal failure and cardiovascular indications. They work by blocking the activity of the enzyme renin, which is secreted from the kidney into the bloodstream where it catalyzes the formation of the peptide hormone angiotensin I from its precursor protein angiotensinogen. Angiotensin I is, in turn, converted by angiotensin-converting enzyme (ACE) into angiotensin II, which influences blood pressure, arteriosclerosis and remodeling of the heart and kidney.

Blocking that cascade does not appear to be linked to any serious side effects, Clozel said on the conference call.

"It's one of the safest, best-known approaches - the only problem was bioavailability," he said. Actelion has made "substantial progress" in the area in recent months, he said, boosting the oral availability of non-peptide lead compounds in rats by up to 70 percent.

However, it is not leading the development of the new category. Novartis AG, of Basel, Switzerland, plans to commence a Phase III trial of its oral renin inhibitor candidate, SPP100, next year, following its disclosure of positive Phase II data last month. Lloyd-Harris sees significant long-term potential in the area.

"I think they'll be large products," he said. "I think they'll be worthy successors to the angiotensin II antagonists and the ACE inhibitors over time."

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