BioWorld International Correspondent

Cytos Biotechnology AG gained validation of its Immunodrug therapeutic vaccine development technology from fellow Swiss firm Novartis AG, which has decided to take out a commercial license to a candidate vaccine for Alzheimer's disease. The event triggered an up-front payment, annual license fees and a milestone payment.

"That marks over two years of work together," Cytos' executive vice president of business development and strategy, Mark Dyer, told BioWorld International. Basel-based Novartis originally entered an agreement with Cytos in 2001, which was valued at up to CHF70 million (US$50.8 million). That deal covered three indications - allergy and rheumatoid arthritis, as well as Alzheimer's.

The news last week wasn't all good, however. Zurich-based Cytos also disclosed that the partners decided to wind up their allergy collaboration. The rheumatoid arthritis program continues, but is at an earlier stage owing to a change of target. "We felt there were better, more disease-relevant targets in rheumatoid arthritis, which prompted them to change," Dyer said.

The Alzheimer's Immunodrug is now slated to enter the clinic next year. Immunodrugs are designed to work by presenting disease-associated targets to the immune system in highly repetitive arrays on virus-like particles. That triggers neutralizing antibody or T-cell responses, depending on the design of the vaccine candidate. "They are a new therapeutic modality," Dyer said.

Cytos has 21 such Immunodrugs in development, including one for nicotine addiction that has completed a Phase I trial. "We're planning to go into Phase II in October," Dyer said. It is looking to partner out part of the portfolio - particularly candidates aimed at major indications - to large pharmaceutical firms.

At mid-year, the company had cash and marketable assets of more than CHF75 million. Chief Financial Officer Jakob Schlapbach said the company is funded until "well into 2006."

The news was cheered by investors, who lifted Cytos' share price by more than 20 percent during trading last week, to close at CHF39.