By Cormac Sheridan

BioWorld International Correspondent

Cytos Biotechnology AG entered three separate research and development agreements with Novartis AG to develop therapeutic vaccines for treatment of allergy, rheumatoid arthritis and chronic nervous system disorders.

The deals, which are based on three defined targets, have a combined value of CHF70 million (US$43 million), comprising research funding and pre-commercialization milestone and license payments. Cytos also will receive royalties on eventual product sales. Cytos CEO Wolfgang Renner said the terms were ¿on the high side of the industry standard.¿

The agreement is the Zurich, Switzerland-based company¿s most significant to date, Renner said. ¿This is also our future strategy,¿ he said. The company wants to partner with larger players on indications with broad market potential. But it also plans to undertake on a solo basis full clinical development and, eventually, marketing in niche areas, including certain allergies and cancers. Renner said he expects the first such solo program to reach the clinic early next year.

Cytos was established in 1995 as a spin-off from the Swiss Federal Institute of Technology in Zurich. Its initial business was based on developing generic versions of existing biological drugs. But it has since developed two core platforms: its proprietary ¿Immunodrug¿ therapeutic vaccine technology and a target identification and validation system, called DELphi, which integrates viral expression of cDNA libraries in mammalian cells with production of fully functional human proteins.

The Immunodrugs vaccination concept is based on the company¿s own research finding ¿ published in Science ¿ that disease-related targets induce a neutralizing antibody response when presented to the immune system in highly repetitive arrays linked to viral capsid structures. ¿This is something which would not normally be found in the human body,¿ Renner said. ¿This is new and inventive and where our IP is based.¿

The company has additional immunomodulation techniques that enable it to direct the immune system toward antibody production or toward a cell-mediated response. The company is applying this therapeutic concept to diseases and targets that are well understood. For example, Renner said that the Immunodrug approach could help to tackle the problem of poor patient compliance in hypertension.

The current agreement is Cytos¿ second with Novartis, of Basel, Switzerland. It also has alliances with Bayer AG, of Leverkusen, Germany, and with Abbott Laboratories, of Abbott Park, Ill. Details of those have not been disclosed, however.

Cytos has so far raised CHF61 million in two financing rounds. It is fully funded for two years, Renner said, but it is open to additional investment opportunities. ¿If the markets improve we will be there, either with an IPO or a private financing,¿ he said.