By Aaron Lorenzo

Looking to further develop the next generation of an already approved product, Chiron Corp. nixed a prior deal with Aerogen Inc. and entered into a collaboration with Inhale Therapeutic Systems Inc. to produce an inhaled, dry powder tobramycin therapy for the treatment of Pseudomonas aeruginosa lung infections.

¿We just believe that the Inhale agreement gives us the opportunity to [reach] the best approach to develop a next-generation TOBI [tobramycin solution for inhalation] product,¿ said John Gallagher, Chiron¿s media relations manager. ¿The Aerogen product was a liquid formulation, and the Inhale product is a dry powder formulation. We see that as one of the benefits of the agreement.¿

TOBI¿s current indication calls for its delivery by way of a nebulizer system in a liquid form for cystic fibrosis patients who develop lung infections because of mucus resulting from P. aeruginosa. The deal with Inhale calls for the drug to be developed as a dry powder, which would enable its transfer through a smaller, more convenient system. Delivered via current means, the process takes about 20 minutes.

¿We¿re hoping for something that¿s easier for patients to use, and thereby increases compliance,¿ Gallagher said. ¿We¿re hoping to develop something that¿s more portable and allows for faster dosing.¿

Terms of the agreement call for San Carlos, Calif.-based Inhale to develop the formulation, as well as clinical and commercial manufacturing of the drug formulation and device combination.

¿Our strategy is to provide biotech companies with drug delivery solutions where Inhale can lead and biotech companies can develop products with value,¿ said Ed Mathers, Inhale¿s vice president of marketing and business development. ¿How do we apply our advanced inhalable technology, our enhanced platform, to enhance drug products? What we¿ve been able to do with the Chiron situation is to apply our enhanced platform, in not only the anti-infective marketplace but also make it a multiproduct agreement. In addition, we¿ve been able to expand and execute on our strategy to get small molecules [for local lung delivery], which this does. So it gives us small-molecule local lung [delivery] in an anti-infective marketplace, a fairly significant market.¿

Emeryville, Calif.-based Chiron will develop the clinical protocol and commercialize the resulting product, pending regulatory approval.

While financial terms were not disclosed, Inhale will receive research and development funding, milestone payments as the program progresses through further clinical testing, and royalty payments if a product is commercialized.

The deal also calls for the companies to explore the development of other inhaled antibiotics using Inhale¿s Inhance pulmonary delivery platform. The companies have begun to explore other inhaled antibiotic products for lung infections.

¿The tobramycin agreement executes on one of our strategies of where we¿re going to develop products and programs where we identify a molecule, apply our technology and then look to partner it,¿ Mathers said. ¿Tobramycin is the first such program where Inhale did its own proprietary work, then turned around and partnered it with a partner such as Chiron.¿

The tobramycin product was introduced in 1998 and is the first inhaled antibiotic approved for treating P. aeruginosa lung infections in cystic fibrosis patients. The company acquired the technology as part of its purchase of Seattle-based Pathogenesis Corp., which Chiron bought for about $700 million in 2000. (See BioWorld Today, Aug. 15, 2000.)

Chiron therefore inherited the deal with Aerogen, which had entered into that agreement with Pathogenesis earlier in the same year. (See BioWorld Today, March 3, 2000.)

Sunnyvale, Calif.-based Aerogen, which learned of Chiron¿s decision on Thursday, saw its stock (NASDAQ:AEGN) fall 88 cents on the news Tuesday to close at $2.34, a 27 percent drop.

¿The current dosage is 300 mg, and the dosage form is a 5 mL nebule over 60 mg per mL, solution which is administered twice daily for one month, followed by a month¿s respite from treatment,¿ Aerogen Chairman and CEO Jane Shaw said in a conference call. ¿Since Pathogenesis was acquired by Chiron, the product requirements have changed quite dramatically. For example, Chiron has requested that we work with a much higher strength formulation of tobramycin, a much more highly viscous formulation. Aerogen has consistently stated that our aerosol generator was not designed to aerosolize highly viscous material.

¿It¿s important to note that Aerogen owns all rights to the inhaler technology and that Chiron will have no continuing rights to use any Aerogen technology.¿

Chiron¿s stock (NASDAQ:CHIR) gained $1.07 Tuesday to close at $43.33, while Inhale¿s stock (NASDAQ:INHL) jumped 13 percent, up $2.12, to close at $18.18.

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