By Matthew Willett

Neurocrine Biosciences Inc. expanded its deal with Taisho Pharmaceuticals Ltd., giving Taisho rights to develop and commercialize Neurocrine's altered peptide ligand (APL) for diabetes in North America and other countries outside Europe and Asia.

The $45 million original deal with Tokyo-based Taisho, struck in July, covered only European and Asian distribution. The expansion drives the collaboration's potential value beyond double that sum.

Including potential license fees, purchase fees, milestone fees and development expenses for the clinical development of the APL NBI-6024, Neurocrine stands to net up to $100 million in the revised deal. Neurocrine, of San Diego, also plans to see payments based on future sales of the drug.

Neurocrine CEO Gary Lyons said the expansion fits the company's core strategy to hold compounds well into late-stage testing, adding value to the programs while spreading risk.

"We felt that diabetes was a little outside our neuro/endocrine focus," Lyons told BioWorld Today. "As with the multiple sclerosis program, we were able to add significant value to the program, and it was a difficult deal to pass up. It fits the core strategy to hold our assets longer, until about Phase II, at which time we can partner programs out."

Neurocrine said it has received or expects to receive $12 million under the collaboration this year.

The APL, a treatment for Type I diabetes, is in a 30-patient Phase I/II dose-ranging trial, and Neurocrine plans to begin several Phase II trials in 2001.

"We've been working together for about a year, through two Phase I trials, a single-dose and a multiple-dose trial, and since we filed an IND and it's been approved, we've started a Phase I/II trial with 40 patients to evaluate safety and preliminary efficacy. We've got an ambitious program for the coming year with two Phase II/III 300-patient trials planned."

Those Phase II/III trials are expected to run for two years, Lyons added, and could be pivotal trials that support regulatory approval efforts. Lyons said the market for a Type I diabetes therapeutic encompasses about 2 million sufferers around the world.

"There are estimated to be 1 million cases in the U.S., and an equal number of people outside the U.S. suffer from Type I diabetes. There's no preventative therapy available, so diagnosis is going to lead to a lifetime of insulin dependence," Lyons said. "If this can prevent insulin dependence or even delay it, patients can avoid complications and costs associated with insulin dependence. This can not only benefit the patient, but the health-care system."

Partnering NB-6024 frees Neurocrine to pursue other programs, Lyons said. In 2001, he said, the company will have six programs in late-stage testing.

Neurocrine's stock (NASDAQ:NBIX) fell 43.75 cents Tuesday, closing at $31.875.