By Randall Osborne

As the clock ticks on FDA approval of GelTex Pharmaceuticals Inc.'s cholesterol-busting polymer, Cholestagel, the firm has signed a letter of intent for a deal with Sankyo Pharma Inc. worth up to $75 million.

The agreement includes Cholestagel and a second-generation product, GT102-279, that's twice as potent, said Mark Skaletsky, president and CEO of Waltham, Mass.-based GelTex.

"The two are intertwined," Skaletsky told BioWorld Today, adding that the pact probably would not have been completed without the second-generation product.

Sankyo, of Tokyo, will pay $45 million in up-front money and milestones for both products, and $30 million in funding for development of GT102-279.

"We'll continue to do the work [on the second-generation product], and be reimbursed by Sankyo," Skaletsky said. A large Phase II study of GT102-279 is expected to finish by the end of the first quarter 1999, and Phase III trials are slated to begin in the second half of next year, he said.

Of the up-front money, $13 million will come in the form of licensing and option fees for Cholestagel, a non-absorbed hydrogel that binds with bile acids in the intestinal tract and removes them.

Because bile acids are required to digest food, the liver of the patient treated with Cholestagel converts artery-clogging LDL cholesterol into bile acids to replace those bound by the drug.

Sankyo also has agreed to provide a $20 million milestone payment upon FDA approval of Cholestagel. GelTex submitted its new drug application for the product in July, and a decision is expected from the FDA in mid-2000. (See BioWorld Today, Aug. 2, 1999, p. 1.)

The second-generation polymer is more available than Cholestagel for bioacids, Skaletsky said.

"They can attach and stay on there longer," he said.

Cholestagel will be sold and marketed in the U.S. by Sankyo Parke-Davis, a joint venture between Sankyo and Parke Davis, a division of Morris Plains, N.J.-based Warner-Lambert Co. The Sankyo deal includes additional milestone payments for marketing approval of the second-generation product in Europe and Japan.

Conventional therapy for lowering cholesterol uses a class of drugs called statins. Earlier this year, GelTex reported positive results from a second Phase III study of Cholestagel, which has been tested for use as a monotherapy and with statins. (See BioWorld Today, March 16, 1999, p. 1.)

GelTex's stock (NASDAQ:GELX) closed Monday at $12.812, down $1.50, or 10.5 percent.