By Brady Huggett

Karo Bio AB entered its largest collaboration to date, with American Home Products Corp., to focus on a drug to prevent and treat atherosclerosis in a deal that could bring Karo Bio as much as $100 million.

If the three-year agreement gives rise to two products marketed worldwide, Karo would receive up to the $100 million windfall. The deal entails an up-front payment, research and development funding, and milestone payments linked to development and global approvals. Karo also would receive royalties in the 7 percent to 15 percent range and an in-market bonus if certain sales goals are met.

¿It¿s very important to us,¿ said Bjorn Nilsson, CEO of Karo Bio. ¿We have been seeking a collaboration with American Home Products, which has decided to invest a lot in the cardiovascular area. They are very aggressive in this market segment. We see this as a model collaboration for us.¿

Nilsson said Karo Bio, of Huddinge, Sweden, had been in late-stage negotiations with AHP and one other company before signing on with the Madison, N.J.-based pharmaceutical company.

The joint research program will center on the liver X receptor (LXR), at least at first. By affecting the receptor, it is possible to stimulate the production of a specific transport protein that dissolves cholesterol buildup in arteries.

¿We are targeting atherosclerosis primarily, but the deal is not limited to that,¿ Nilsson said. ¿It is based on the LXR receptor, meaning we do see additional clinical indications as a possibility.¿ The companies will start exploring those other disease areas immediately, Nilsson said.

Although the work is just now budding, the companies have set an aggressive timeline.

¿I think we will aim for getting a product into the clinic in three years, but we do recognize this is an early stage program,¿ he said, adding that the deal can be extended by two years if so desired.

Nearly a year ago, U.S. subsidiary Karo Bio USA signed a deal with Aventis Pharma AG, of Frankfurt, Germany, that had a monetary potential of $32 million. The one-year deal gave Aventis access to Karo Bio¿s Biokey assay technology for targets that have been identified through Aventis¿ genomics efforts. Like the current deal with AHP, that deal could possibly be extended: Aventis has an option to expand the agreement for three more years. (See BioWorld Today, Oct. 24, 2000.)

Other Karo Bio collaborative projects include work with other big-time pharmaceutical names, such as Abbott Laboratories, of Abbott Park, Ill.; Merck & Co. Inc., of Whitehouse Station, N.J.; and Bristol-Myers Squibb Co., of New York. But the newest deal with AHP financially betters them all, Nilsson said.

¿You could say the others are similar, but this is the largest deal,¿ he said. ¿We are very happy and very impressed with what [AHP] has and the commitment they have shown [to us] and in the area in general,¿ Nilsson said. ¿The starting gun was yesterday and we are running at a high pace to make progress in this important program.¿