By Randall Osborne

West Coast Editor

Celgene Corp. and Novartis Pharmaceuticals Corp. said the FDA has provided them with an approvable letter for dexmethylphenidate HCl, a refined formulation of Ritalin (dl-methylphenidate) ¿ and approval, when it comes, will mean more than it usually does in such partnerships.

If the FDA gives the drug its nod, Warren, N.J.-based Celgene will be in line to get royalties not only from that treatment, but from the entire line of Ritalin products, including the first version of Ritalin, developed by Novartis.

¿I believe it¿s the first case in the pharmaceutical industry where the developer pays royalties on the original compound,¿ said John Jackson, chairman and CEO of Celgene.

Analysts are estimating the eventual total sales between $150 million and $300 million, of which Celgene would get about 20 percent.

¿It¿s a fabulous deal for us, and enables Novartis to rescue their Ritalin franchise,¿ Jackson told BioWorld Today, noting that the field for such drugs is growing steadily more competitive.

The Celgene drug, which contains the only active isomer for attention deficit hyperactivity disorder, lets patients take half the dose of Ritalin.

¿One hopes there would be lower side effects [on the label],¿ Jackson said, noting that ¿parents are very involved¿ in choosing treatments.

The idea with the new version was also to get longer-lasting activity, he said.

¿Obviously, if you can get through the school day, you¿re doing pretty well,¿ Jackson said. ¿[In the pivotal trial], we measured at two hours, four hours and six hours, but we didn¿t measure at eight and 10 hours.¿

A pilot study testing the drug beyond six hours has just been completed, with results expected to be available this quarter. Meanwhile, Novartis is developing a 10-hour version separately, Jackson said.

¿The NDA has been submitted, and I believe they are at most a couple of months behind [the Celgene drug],¿ he said. ¿In four years, we don¿t care which drug they¿re selling.¿

Celgene entered the development and marketing deal with Novartis for the newly formulated Ritalin drug last year, with analysts valuing the agreement at more than $100 million. Novartis, of East Hanover, N.J. ¿ an affiliate of Basel, Switzerland-based Novartis AG ¿ more recently entered an agreement with Celgene to develop and market selective estrogen receptor modulator compounds for osteoporosis. (See BioWorld Today, Jan. 19, 2001, and April 27, 2000.)

Celgene¿s Thalomid is approved for the cutaneous manifestations of moderate to severe erythema nodosum leprosum in leprosy, and is being developed in multiple cancer indications. In the deal with Novartis over the new Ritalin drug, Celgene has retained rights for oncology indications.

¿There¿s a growing belief that cognitive dysfunction, or what patients call chemo brain,¿ could be treated by Ritalin,¿ Jackson said.

Celgene¿s stock (NASDAQ:CELG) closed Wednesday at $24.89, up $3.35, or 15.55 percent. Novartis¿ shares (NYSE:NVS) ended the day at $36.53, up 54 cents.