By Brady Huggett

Celgene Corp. partnered with Novartis Pharma AG for research and development of selective estrogen receptor modulator compounds for osteoporosis in a move that has Novartis picking up the tab.

"We have spent a lot of time developing a set of [selective estrogen receptor modulator compounds] that we know will be useful in osteoporosis," said David Anderson, chief scientific officer of Celgene's Signal Research Division in San Diego. "And they will be costly to develop. Here's how we see the benefit: Novartis will pay the bill, so to speak."

The signing of the agreement triggers an undisclosed up-front payment to Celgene in the deal that also calls for milestone payments for specific preclinical, clinical and regulatory endpoints, as well as royalties. Novartis, of Basel, Switzerland, has worldwide development and commercial rights for compounds to prevent and treat osteoporosis, and also exclusive rights to develop the selective estrogen receptor modulator (SERM) drug leads for additional indications, including diseases of the cardiovascular and central nervous systems. But not cancer, Anderson said.

"We have selected, out of the compounds, ones that we have oncology rights to," Anderson said. "We sort of carved that out of the deal. With the money [Novartis] paid us, we will take some compounds into oncology on our own."

Celgene, of Warren, N.J., has hooked up with Novartis before. In April, it signed a deal granting an exclusive worldwide license to Novartis for the development and marketing of Attenade (d-methylphen-idate), a chirally pure version of Ritalin for use in the treatment of attention deficit/hyperactivity disorder. Financial terms for that deal, like the current one, were not disclosed, but analysts at the time valued it at more than $100 million. Anderson said the SERM deal with Novartis stemmed more from the research at Celgene's Signal Research Division in San Diego than the companies' past history. (See BioWorld Today, April 27, 2000.)

Celgene purchased Signal Pharmaceuticals Inc. and its SERM technology last year in a deal initially valued at $196 million. (See BioWorld Today, Sept. 5, 2000.)

"This [SERM] research came out of the Signal Division of Celgene," Anderson told BioWorld Today from San Diego. "We [at Signal] selected [Novartis] independent of Celgene. Novartis has a very strong bone group and they were very serious about our technology in this field. They had looked around the world and decided on us for their overall strategy."

There are two SERMs already approved: tamoxifen, for breast cancer, and raloxifene, for osteoporosis. Anderson said the difference with Celgene's compounds lies not only in their makeup, but also in the method used to find them.

"Our SERMs are chemically different, but the way we discovered them is through functional genomics, instead of receptor binding," Anderson said. "The reason why there is still a need for SERMs is because there are side effects - problems - or because [current SERMs] are not as efficacious as we would want them to be."

Celgene's SERMs are designed to mimic the positive effects of estrogen while minimizing the negative effects excessive estrogen can have on the body.

"Estrogen as a hormone has a lot of beneficial effects on the body," Anderson said. "Too much, however, on reproductive tissues can cause cancers. We designed our compounds so they may counteract these problems and that may be an improvement in the class of compounds that are out there now."

The osteoporosis compounds are still in early development, but Anderson said the hope is to be in patient trials within a year or a year and a half. He added that the companies will set up preclinical models to select compounds that have the right profile for further indications, but could not put a timeline on such development.

Celgene's flagship product, Thalomid, is approved for the cutaneous manifestations of moderate to severe erythema nodosum leprosum in leprosy - and in many studies in other indications - but Anderson said the SERM program is important in Celgene's oncology department and the deal itself says something about Celgene's abilities.

"It validates our drug discovery capabilities to have a big pharma partner with us," he said. "Without giving specific figures, this is a very good deal financially for us because the milestones are very good at the development stage and the royalties are very good as well."

Celgene's stock (NASDAQ:CELG) rose $1.937 Thursday, or about 8 percent, to close at $26.812.