By Kim Coghill

Washington Editor

Genome Therapeutics Corp. entered the next phase of business development by purchasing the U.S. and Canadian rights to ramoplanin, an antibiotic in Phase III studies for prevention of bloodstream infections caused by vancomycin-resistant enterococci (VRE).

The deal between Genome Therapeutics and Biosearch Italia S.p.A., which owned all rights to ramoplanin, calls for Genome Therapeutics to pay out an initial $2 million plus make milestone payments up to an additional $8 million in cash and notes convertible into its stock. Genome Therapeutics also is under obligation to purchase bulk material from Biosearch, to fund the clinical trials and to pay a royalty on product sales. Biosearch retains rights in other markets.

Steven Rauscher, CEO and president of Waltham, Mass.-based Genome Therapeutics, called the licensing deal ¿a natural progression for a biotech company.¿

¿At this point it is right for us to accelerate our development into the product field and often a company¿s first products are ones that are in-licensed to fit within the same category of the drug discovery program,¿ Rauscher told BioWorld Today. ¿So we¿ve been moving in this direction for many years and it really opens up the next stage of the life of the company.¿

Genome Therapeutics is a genomics services and biopharmaceutical company with a number of collaboration agreements with giants like Wyeth-Ayerst Laboratories, a division of American Home Products Corp., of Madison, N.J.; Aventis Pharma SA, of Frankfurt, Germany; and Schering- Plough Corp., of Madison, N.J.

The deal with Biosearch Italia, of Gerenzano, Italy, started to unfold back in August when Biosearch said it intended to reclaim the rights to ramoplanin from IntraBiotics Pharmaceuticals Inc., of Mountain View, Calif. IntraBiotics¿ stock dropped 33 percent in March when the company said Phase III clinical trials would be delayed a year. (See BioWorld Today, March 13, 2001.)

IntraBiotics ended up cutting its work force and reorganizing collaborations, including the one surrounding development of ramoplanin, which eventually ended up back in the hands of Biosearch. (See BioWorld Today, June 1, 2001.)

¿We had been looking at a lot of different products in the marketplace and this was a product that we thought a lot of,¿ Rauscher said. ¿When we saw it become available, we moved very quickly, and fortunately, I think we had a lot of good mutual interpersonal chemistry and respect with the people at Biosearch Italia, and we were able to conclude negotiations pretty rapidly. We were in the right place at the right time.¿

Rauscher expects to file a new drug application in 2004 for ramoplanin, an orphan product in Europe and a fast-track drug in the U.S.

The current Phase III trial is designed to look at whether oral prophylaxis with ramoplanin reduces the incidence of VRE bloodstream infections in cancer patients known to carry VRE bacteria in their intestines. About 25 percent, or 260 patients, have been enrolled in the 950-patient study slated for 40 U.S. sites.

Rauscher said the first patient was enrolled in June 2000. ¿I will say this is a very well-designed clinical trial but it is challenging to enroll,¿ he said. ¿There are a lot of logistics in how this has to work at the level of the investigative site and it requires the involvement of physicians of two different specialties ¿ infectious disease and cancer ¿ to work together. It is challenging for the study coordinators.

¿We are confident that we will be able to enroll this because we are working with a first-class group of investigators,¿ he said.

In the Phase II, multicenter, double-blind, placebo-controlled trial, ramoplanin was shown to be safe and well tolerated. After seven days of treatment, 90 percent of patients who received ramoplanin had no signs of VRE in their gastrointestinal tract.

Genome Therapeutics and Biosearch Italia have established a joint committee to coordinate efforts on the clinical development and future global commercialization of ramoplanin.

Genome Therapeutics¿ stock (NASDAQ:GENE) closed Tuesday at $6.69, up 47 cents.