By Mary Welch

Coley Pharmaceutical Group signed a deal worth up to $72 million with SmithKline Beecham plc to develop immunotherapeutic products based on CpG DNA, its technology for immune system stimulation.

The agreement gives London-based SmithKline Beecham (SKB) a worldwide co-exclusive license to cytosine-quanine dinucleotides (CpG) DNA-based compounds, including CpG 7909, Coley's lead immune stimulant, for use in certain therapeutic and prophylactic vaccines for infectious diseases.

In exchange, privately held Coley (formerly CpG Immunopharmaceuticals) received $8 million in up-front payments, license fees and guaranteed research and development funding. Another $64 million could come to the Wellesley, Mass.-based company in the form of milestone payments as well as royalties on any future products. No equity was involved.

"We're very pleased with the deal and the fact that we have been able to move compounds quickly through to clinical trials," said Robert Bratzler, Coley's president and CEO. "We were founded in 1997 and we're doing a deal with a world leader in infectious disease vaccines."

The two companies will conduct parallel research and development. SmithKline Beecham Biologicals, of Rixensart, Belgium, will handle the research for its parent company.

SKB was attracted to Coley's technology for two reasons, Bratzler said. "Our technology is a rapid and comprehensive product that stimulates the immune system. They have a number of important vaccines where this could be useful."

The second reason is that the technology may enhance treatment regimens to "clean chronic carriers of diseases, such as hepatitis C," Bratzler said.

CpG DNA is a technology that encompasses a family of molecules for naturally stimulating and modulating the human immune system. The technology promotes white blood cell proliferation and rapidly activates both cellular and humoral immune responses. Additional research has shown that subtle variations in CpG DNA sequences can alter immune responses, providing the potential to create highly specific therapies.

It seems that the human immune system recognizes CpG dinucleotides as an early warning sign of infection and, when CpG DNA enters a cell, it activates genes that jump-start the immune system, the company said.

The company's two lead products, CpG 7909 and CpG 8916, are proprietary synthetic DNA sequences. CpG 7909 is about to enter Phase II trials for hepatitis B and will start Phase I/II in the U.S., Canada and Europe as a cancer vaccine and in a cancer safety trial, as well as an allergy/asthma trial, an allergy/asthma safety trial and one for flu. The cancer safety trial is a forerunner of a non-Hodgkin's lymphoma efficacy trial.

CpG 8916 will start Phase I trial in cancer next year.

"Data from the trials should start becoming known by the end of the year," Bratzler said. "That will give us a good idea of where we will go. While this collaboration is for several therapeutic and prophylactic infectious disease indications, it is not for all the indications," Bratzler said. "We are in discussions with potential partners for the allergy/asthma and cancer indications. It has a multi-disease use." n