By Brady Huggett

The rule of thumb is don't mix business and pleasure, but for BioStratum Inc. and Kowa Co., it was love that sealed their potential $25 million license deal in Asia.

BioStratum, of Research Triangle Park, N.C., signed a license agreement granting exclusive rights in Japan, China, Korea and Taiwan to Kowa, of Nagoya, Japan, for the development, manufacturing and marketing of BioStratum's lead drug candidate for diabetic kidney disease, Pyridorin.

"Kowa came to us," said Claus K hl, CEO and president of BioStratum. "They were seeking candidates and they fell in love with this particular candidate. We looked at them, got to know them pretty well and I felt like they were a good partner. I thought they would put this at the top of their priority list."

For BioStratum and Pyridorin, K hl said connecting with a pharmaceutical company that promised to be there was of utmost importance.

"I have experience in big pharma and my concern was that we would go to one of the major players and a year from now they would not still be so interested in working with our product," K hl said. "[Kowa] is desperate to bring this to the market ASAP. They want to do a very good job and we want committed partners. We won't lose their attention."

The deal calls for BioStratum to receive an undisclosed up-front license fee and cash payments for specified development milestones. Kowa will pay royalties on Pyridorin sales, but the fees and up-front payments leading up to commercialization could reach the $25 million mark.

While Kowa, a privately owned Japanese conglomerate with interests in textiles, electronics, ophthalmics and pharmaceuticals, will handle things in Asia, BioStratum has been seeking a Pyridorin partner for the rest of the world.

"Kowa can provide a very skilled development department and they know how to develop drugs in Japan," K hl said. "They know all the tricks of the trade. A goal for us this year is to sign, hopefully, one partner for the United States and Europe for Pyridorin."

Pyridorin is a small-molecule drug candidate to treat diabetic kidney disease. It works by inhibiting the formation of advanced glycation end-products (AGEs). AGEs are created in the bodies of diabetic patients, disrupting various systems, including the kidneys and arteries. Pyridorin is designed to stop such damage.

"It does not cure what has been destroyed but it prevents further destruction from taking place," K hl said. "It gets in there and stops more AGEs from being formed."

Pyridorin is in Phase II now, but K hl said Phase III trials are being sketched. BioStratum will discuss Pyridorin's next stage with the FDA this summer and also with the partner on board by then. Its next product, the anti-angiogenesis agent Angiocol, should move into humans this year.

"In our opinion, [Angiocol] has a good edge over the products already out there," K hl said. "We have strong data in six animal models that show it prevents tumor growth." K hl added that BioStratum would file an investigational new drug application for the product later this year.

BioStratum raised $28 million privately in March 2000 and gathered $22 million in a financing the year before. With Pyridorin and Andiocol moving through trials, it's nearly time to go back to the well, K hl said. (See BioWorld Today, March 28, 2000, and April 1, 1999.)

"We will go through another financing this year, that is in the plans," he said. "[Going public] is something we would like to consider very seriously - if the market is open, probably this year."

K hl understands the never-ending drive for funds, but the deal with Kowa represents more than the $25 million. Companies with common interests make good partners, he said.

"[Kowa] is prepared to pay $25 million to get access to this drug and they didn't do this after a few meetings, they did it after going through all the data," he said. "This, to me, is even more important than money. To see someone out there that shares your enthusiasm for what you are doing is very good for me to see."