By Matthew Willett

Aradigm Corp. will complete the ongoing Phase IIb trial of the AERx Pain Management System after renegotiating the program's development agreement with partner SmithKline Beecham plc.

The original agreement of October 1997 called for London-based SKB to fund the Phase IIb trial and later trials. Hayward, Calif.-based Aradigm initiated the Phase IIb trial in the third quarter of 2000.

That deal, estimated to be worth up to $40 million for Aradigm, included a $9 million up-front payment from SKB and a $5 million SKB equity investment in Aradigm. SKB also signed on for milestone payments if it takes up the option to develop opiates and opioids for pulmonary delivery with the AERx system. (See BioWorld Today, Oct.2, 1997.)

Aradigm Chief Financial Officer Norman Halleen called the announcement a nonevent, saying the company simply wanted to clarify the collaboration's position. It goes on, he said, with little change.

"What we've done is completed the amendment to the agreement that was done earlier this summer," Halleen told BioWorld Today. "There was a lot of speculation over the status of the program, as it was on hold as SKB negotiated with Glaxo Wellcome. We made a comment on the situation that we had initiated the Phase IIb study, and the street had a lot of speculation, but what it means is that we want to let everyone know that the relationship continues with SKB, and we'll continue that relationship with control of the study."

The AERx Pain System is designed to allow patients to self-administer electronic pulmonary-delivered opioid analgesics at home. It monitors the flow of liquid morphine and regulates user intake through both user identification through an electronic bracelet and an automatic shutoff system.

Halleen said the program's future is still in flux, however, as to the funding of future trials. After taking on the program due to the SKB delay, the companies are taking a wait-and-see outlook. "We'll look forward and wait to see the results of the study," he said.

Those results, he added, should be available in mid-2001.

"There was a delay," Halleen said. "We were in a holding pattern while they were getting together with Glaxo, and it caused an unnecessary delay, and that caused us to take control of the program."

He added that the commercial terms of the agreement remain "basically exactly the same. All that's changed is related to control matters."