By Jim Shrine

Cytran Inc. licensed rights to its anti-angiogenesis drug to Alza Corp. in the first collaboration for the privately held company.

Cytran Inc., of Kirkland, Wash., and Palo Alto, Calif.-based Alza agreed to collaborate in a deal that granted Alza U.S. and Canadian marketing rights to IM862, a small peptide that recently was taken into Phase III trials for treating Kaposi's sarcoma (KS). That trial followed release of positive Phase I/II results in May at the American Society of Clinical Oncology meeting.

As part of the deal Alza purchased $5 million of convertible debentures from Cytran, which is raising $20 million through that financing method. Cytran said that will be its final private financing round.

"I think that the company's mission is to be a manufacturer and developer of small peptides for use in oncology and other areas," Cytran Chairman and CEO Dennis Fill said. "Our strategy and objective is to develop a series of alliances that will enable optimization of these peptides' potential on a worldwide basis. Therefore, this first agreement, which covers the USA and Canada for the first of our peptides, is an important step along that path."

The next step, Fill said, is to set up similar agreements with companies in Europe, Japan and other parts of the world.

Deals with Japanese and European companies can be expected "in the immediate months ahead," Fill told BioWorld Today. "We've had a number of companies that expressed initial interest."

Cytran chose Alza for its North American partner because of Alza's increasing focus in the oncology area, Fill said. In March, Alza completed its acquisition of Sequus Pharmaceutical Inc., of Menlo Park, Calif., which has cancer products on the market and in development. In June, Abbott Laboratories, of Abbott Park, Ill., said it would acquire Alza in a stock deal worth $7.3 billion. (See BioWorld Today, June 23, 1999, p. 1.)

Cytran declined to release financial or structural terms of the deal with Alza "primarily because it's confidential for competitive reasons," Fill said. "There are milestone payments - pre-approval and post-approval in a number of areas. And beyond that, we are not making any further comment."

Through institutional and private investors, Cytran is raising up to $20 million in convertible debenture financing to complete clinical trials in KS and other cancers. Alza has purchased $5 million of the debentures and warrants within that offering. Fill would not give the terms of the debentures or say how much money Cytran already has raised. "We're not letting anyone know where we stand," he said, "except to say we're making some encouraging progress."

If all goes as planned, the KS trial of IM862 will be completed by December 2000, and Cytran will file a new drug application with the FDA during the first half of 2001, Fill said. In addition to a Phase III trial in KS, Cytran has IM862 in Phase II trials in ovarian cancer and metastatic melanoma. A Phase II trial in prostate cancer is expected to begin later this month.

In addition to IM862, the company has preclinical work ongoing on similar products, Fill said.

"We have a number of other peptides, which are at an earlier stage of development than IM862, and therefore, we have only early data," he said. "But some of it looks potentially quite interesting."

Results of a Phase I/II trial of IM862 showed one-third of KS patients experienced a complete resolution of lesions or a 50 percent reduction in tumor size. Side effects were minimal. (See BioWorld Today, May 18, 1999, p. 1.)

Following the presentation of the findings, the FDA decided that "if the results are repeated in a well-controlled Phase III trial, it would be adequate to support a marketing application leading to a new drug approval," Cytran said when it released the Phase I/II KS data.

The Phase III trial in the U.S. and Canada is evaluating the drug in 200 patients with five or more KS lesions. It is co-sponsored by the National Cancer Institute and the AIDS Malignancy Consortium.