By Cormac Sheridan

BioWorld International Correspondent

Swedish biotechnology firm Karo Bio AB entered a three-year agreement with American Home Products Corp., of Madison, N.J., to develop a new treatment for atherosclerosis based on modulators of the liver X receptor (LXR).

If the alliance yields two globally marketed products, Karo Bio, of Stockholm, will receive up to US$100 million in up-front payments, R&D funding and milestones, plus royalties and other bonuses on eventual product sales.

LXR has become a major focus for atherosclerosis research because of its stimulatory effect on the production of the cholesterol transport protein ATP Binding Cassette Transporter-1 (ABC1), which governs the transport of cholesterol into and out of the cell.

Patients with Tangier¿s disease, a rare genetic condition characterized by an absence of high-density lipoprotein cholesterol, lack a functioning ABC1 allele and develop atherosclerosis.

South San Francisco-based Tularik Inc. and X-Ceptor Therapeutics Inc., of San Diego, are both active in this field. Nilsson said he believes that several large pharmaceutical companies are as well. But Karo Bio has a number of advantages, he said.

¿We believe that, firstly, we have an interesting patent situation for LXR beta,¿ he said. The company recently gained a U.S. patent on this variant of the receptor, which Jan-Ake Gustafsson, a scientific founder of the company, discovered at the Karolinska Institute in Stockholm in 1995. The company expects European approval to follow. This, combined with Karo Bio¿s background in understanding the structural biology of nuclear receptors and the enabling screening and validation technologies it gained through its purchase last year of Durham, N.C.-based Novalon Inc., puts it in a strong position, he said.

The company¿s program commenced six months ago and is at the early preclinical stage, Nilsson said. ¿We are quite advanced with knockout models,¿ he said. Its chemistry efforts are less developed.