By Brady Huggett

By entering a central nervous system research collaboration with Eli Lilly and Co., D-Pharm Ltd. has also entered a third dimension.

The companies will work on developing novel therapeutics for CNS disorders, focusing on modifying the action and disposition of pharmacological agents discovered by Eli Lilly, of Indianapolis, using D-Pharm's proprietary lipid vector technologies.

D-Pharm's technology is based on lipids playing a role in cell function. It links a lipid to a drug, creating a prodrug. The idea is to enhance the delivery of the prodrug to tissue targets and barrier-protected organs for active drug release.

"We hope the deal is a beginning of a long-term collaboration with Lilly, and we believe our technology may be applicable for a variety of targets and indications," said Itzchak Angel, vice president of research and development at D-Pharm. "It expands our scope to deal with [Lilly's] drugs, it gives us a third dimension."

The agreement specifies that D-Pharm, of Rehovot, Israel, will re-engineer Lilly's lead drug compounds, then allow Lilly to assess their activity in in vitro and in vivo models. Lilly will make an undisclosed equity investment in D-Pharm and will have an option to exclusively license resulting compounds for worldwide development and commercialization. D-Pharm will receive license fees and development milestones, as well as royalties on worldwide sales. If Lilly does not exercise its option, D-Pharm may have an exclusive license option within the same financial terms for any compounds.

Angel could not disclose the financial particulars of the collaboration, but called it "a very important deal for the firm."

Signing up with a pharmaceutical company has given D-Pharm a third leg to stand on. Angel said the company started by selecting generic drugs and modifying them, bettering them through means such as reducing toxicity or improving their penetration to organs across barriers. Angel said the new compounds are separate entities that are patented and give the drug new value. DP-VPA, D-Pharm's product furthest along, is an example. Its a derivative of valproic acid (VPA) linked to a lipid vector that will be developed for chronic and prophylactic treatment of epilepsy, bipolar disorder and migraine. It is in Phase II and has been licensed out to Shire Pharmaceuticals Group plc, of Andover, UK.

But D-Pharm realized there was more it could do with what it had.

"Next, we signed a deal with [Nycomed Amersham Imaging, of Princeton, N.J.]," Angel said. "We established a collaboration in the imaging field, using the same re-engineering technologies."

With the technology extending into two areas, Angel said D-Pharm opened the door to its third dimension.

"We had demonstrated that our technology could be used for a broad spectrum of therapeutic indications," he said. "Several companies came to us to discuss the possibilities of not just using generic drugs, but assisting companies in giving additional value to their drugs. Now we expand this to major pharma where companies have drugs with proven records in indications that can be re-engineered with our technologies."

Choosing to sign with Lilly hinged on several factors, Angel said.

"Eli Lilly is a company that has a well-established record in drug development and we are mainly interested in the central nervous system area," he said. "It came to our attention that our technology could be of particular interest to the drugs they are interested in developing."

With the Eli Lilly deal done, Angel said more should follow.

"Our technology is something that is applicable to a large variety of companies," he said. "We are currently speaking to other pharmas, but we think Lilly could be the first in a row of collaborations."