By Karen Pihl-Carey

Procter & Gamble Co. has returned Axokine rights to Regeneron Pharmaceuticals Inc. after preliminary Phase I results showed effective doses for treatment of obesity and diabetes may be safe only in herpes simplex virus-negative patients.

P&G, of Cincinnati, will complete the Phase I trial by the end of the year. The rest of the trial will involve only HSV-negative patients. Regeneron, of Tarrytown, N.Y., intends to begin a Phase II trial in HSV-negative patients in the first quarter of 2000. The company does not plan to partner with anyone else.

"It's currently our intention to move into the Phase II on our own," Regeneron chief financial officer Murray Goldberg told BioWorld Today. "We certainly have the resources. We had $97 million of cash and investments at June 30."

Regeneron reported a net loss of $16.8 million for the first six months of the year. Its stock (NASDAQ:REGN) closed Thursday at $7.437, down about 22 percent, or $2.215 per share.

P&G decided to return the rights of Axokine because preliminary data showed the drug may target a smaller population than originally anticipated. Nine patients who received low daily doses of Axokine for 14 days lost weight and decreased their food intake. But patients who received a single, higher dose of the drug experienced nausea, vomiting and in some cases, cold sores, or activation of their HSV infection. This indicated that Axokine is well tolerated at low doses, but not at high, single doses, especially when HSV-positive patients are involved.

The question now is whether the most effective and well-tolerated dose is a dose that reactivates herpes. "We don't know that yet, and we won't know that for a while," Goldberg said.

Gordon Hassing, P&G's vice president of research and development, said in a statement that Axokine has shown promise as a treatment for obesity and diabetes.

"However, if the target population were ultimately limited to HSV-negative patients, we concluded that the total market size would not be large enough to be attractive to P&G," Hassing said. "We are, therefore, returning the rights to Axokine to Regeneron so that they can continue to develop this product in a manner that makes sense for a company of their size."

Depending on Axokine's final form once marketed, P&G will receive a small royalty on sales of the drug. P&G already invested $10 million of its original pledge of $15 million made in October 1997 for Axokine, as well as all costs for the development of the drug. (See BioWorld Today, Oct. 1, 1997, p. 1.)

"So they have invested a substantial amount of money into the product to date," Goldberg said.

Although the HSV-negative population remains too small for P&G, it still is attractive to Regeneron, Goldberg said. Estimates of the size of the HSV-negative market vary, depending on demographics and geographics, but some studies have said the HSV-negative population represents as many as one-third of the world population.

"That size of market certainly would be attractive to Regeneron, particularly if Regeneron has 100 percent of that market," Goldberg said. "With P&G returning the rights to Regeneron, we now acquire 100 percent of the rights."

Regeneron plans to conduct the Phase II trial using only HSV-negative patients to keep an aggressive research pace.

"We think that's the quickest way to keep moving ahead rapidly and try to confirm these very preliminary Phase I results and try to identify a dose of Axokine that's effective and well tolerated," Goldberg said.

Despite the setback with Axokine, P&G intends to continue its 10-year research deal with Regeneron initiated in May 1997 to discover, develop, and market pharmaceutical products. At that time, P&G agreed to spend $135 million on Regeneron over the next decade. (See BioWorld Today, May 14, 1997, p. 1.)

Six months before that deal, P&G bought $10 million in Regeneron stock and agreed to pay Regeneron up to $18.75 million over five years for research into muscle diseases and disorders. (See BioWorld Today, Dec. 16, 1996, p. 1.)

The nearly $155 million in support of Regeneron's research programs is unaffected by P&G's decision to give up rights to Axokine. When P&G first offered its support of Regeneron, it restored investors' faith in the company, following the clinical trial failure in 1994 of its lead compound, ciliary neurotrophic factor (CNTF), for treatment of amyotrophic lateral sclerosis (ALS). The trial failed because the primary endpoint of muscle strength was not met. Regeneron also disappointed investors in January 1997 when its new lead candidate, brain-derived neurotrophic factor (BDNF), failed to show efficacy in the treatment of ALS in a Phase III trial.

At the time of these failures, Regeneron was working on Axokine, a second-generation molecule related to CNTF, which the company said showed increased potency and greater solubility and stability than CNTF. Regeneron was developing Axokine for potential treatment of Huntington's disease and other central nervous system diseases in collaboration with Medtronic Inc., of Minneapolis, but that collaboration was discontinued last year, Goldberg said.

The identification of leptin, a protein hormone secreted by fat cells, indicated a potential use of Axokine for obesity and related conditions. Research found obese individuals have high circulating leptin levels. CNTF or Axokine could suppress appetite by activating the same intracellular signaling pathways as leptin. Axokine binds to the Axokine/CNTF receptor in the hypothalamus and stimulates the signaling pathways that suppress appetite and reduce body weight. In preclinical studies, Axokine suppressed appetite in mice. The mice did not overeat after the treatment stopped, and they maintained the weight loss for a period of time.

Separately, Regeneron is conducting clinical studies with Amgen Inc., of Thousand Oaks, Calif., of Regeneron's BDNF for ALS, and neurotrophin-3 (NT-3) for constipation conditions in patients with spinal cord injury, Parkinson's disease and other disorders.

A multi-center study of more than 300 ALS patients who will receive BDNF subcutaneously began in August. The companies have completed a small study of NT-3 in healthy volunteers and patients suffering from severe idiopathic constipation, and has other small studies under way.