By Mary Welch

Bayer AG will discontinue development of BAY 44-3428, an asthma treatment being developed in conjunction with Axys Pharmaceuticals Inc., due to toxicity issues.

"Obviously we're disappointed," said John Walker, chairman and CEO of Axys. "But this is a compound-specific issue. We will meet with Bayer over the next several months, but we still intend to move forward to fully develop other compounds in our tryptase inhibition program, whether with Bayer, by ourselves or with other partners."

Walker stands behind the program. "We believe its mechanism of action is a viable mode of therapeutic intervention for the treatment of asthma, acute inflammatory bowel disease and other disorders, and we've demonstrated that in two previous Phase IIa trials. We have a validated target. We had one compound fall out for toxicity reasons but that doesn't diminish the importance of tryptase inhibitors."

Those earlier Phase IIa trials, completed in the UK, showed that APC 366, the first-generation compound, could alleviate symptoms associated with allergen-induced asthma, with statistically significant results in the reduction of the late airway response as measured against both baseline and placebo.

Bayer, based in Leverkusen, Germany, chose a later product, BAY 44-3428, for development as an oral asthma treatment based on the demonstrated in vivo efficacy of the compound in primate models of asthma. Bayer's decision to discontinue development was based on its view that the toxicological properties of this compound precluded advancement into clinical development. The toxicity issues involved the effects of the drug on fetuses in utero, Walker said.

The decision does not affect Axys' Phase II trial of APC 2059, a tryptase inhibitor being developed for the treatment of acute inflammatory bowel disease. APC 2059 is a second-generation tryptase inhibitor developed in the Bayer collaboration. It is from a chemically distinct class of compounds from the third-generation compound, BAY 44-3428, and does not demonstrate the toxicological properties found with BAY 44-3428.

APC 2059 is in Phase II trials. A best-case scenario would see a new drug application filing at year-end 2002, Walker said.

The compound came out of the laboratories of Arris Pharmaceutical Corp., of South San Francisco. Arris merged with Sequana Therapeutics Inc., of La Jolla, Calif., to form Axys in 1997. (See BioWorld Today, Nov. 4, 1997, p. 1.)

South San Francisco-based Arris and Bayer signed a five-year agreement in 1994 worth up to $70 million to develop drugs and diagnostics from Arris' tryptase and chymase inhibition program for inflammatory disorders. About 60 percent, or $42 million, was in up-front and research payments. No equity was involved. At the time of the deal, APC 366, which was the first generation of the drug, was in Phase I studies in the U.S. and UK. While the focus of the collaboration was to develop orally active compounds, APC 366 was designed for inhalation. (See BioWorld Today, Nov. 29, 1994, p. 1.)

Two years ago, Axys filed an investigational new drug application for a dry-powder inhaler formulation of APC 366. Bayer dropped its work on its inhaled trypatse inhibitor in favor of Axys' product. Axys' formulation was stopped due to irritation issues.

Ayxs' stock (NBASDAQ:AXPH) closed Wednesday at $4.06, down $1, or 20 percent.

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