By Mary Welch

Intercardia Inc. and Interneuron Pharmaceuticals Inc. restructured their relationship with Interneuron reducing its ownership of Intercardia from 61 percent to 9 percent and increasing its interest in Bextra, a drug that is being developed by the two companies.

"It's a bit complicated but we believe it's in the best interest of both companies," said Bennett Love, vice president of corporate planning at Research Triangle Park, N.C.-based Intercardia. "We like the guys at Interneuron but, from their perspective, they felt they weren't getting enough credit for the non-Bextra programs. And from our perspective, we believe in the non-Bextra part of the company. The deal is structured so that each company gets what it wants."

Bextra (bucindolol), a vasodilating non-selective beta blocker, is in Phase III trials for the treatment of congestive heart failure. The trial, dubbed the bucindolol evaluation in acute myocardial infarction trial (BEAT), is evaluating the drug's ability to prolong survival in patients with reduced left ventricular systolic function within seven days after an acute myocardial infarction.

The restructuring calls for Interneuron, of Lexington, Mass., to redeem 4.2 million of the 4.5 million shares of Intercardia common stock it owns for an increase in direct ownership of a subsidiary, CPEC LLC, which holds the U.S. rights to Bextra. Interneuron owned 20 percent of CPEC and Intercardia 80 percent. Under the new arrangement, Intercardia will now fund 35 percent and Interneuron 65 percent of Bextra's development in the U.S. and Japan. The two companies will share, in the same proportion, any profits from the commercialization of Bextra.

CPEC has an exclusive worldwide license from Bristol-Myers Squibb Co., of New York, to develop and commercialize Bextra for congestive heart failure.

Outside the U.S. and Japan, the marketing rights to bucindolol belong to BASF Pharma/Knoll AG of Ludwigshafen, Germany. Knoll is conducting a Phase III BEAT trial in Europe.

As part of the realignment, Intercardia will change its name to Incara Pharmaceutical Corp. Its NASDAQ symbol will change to "INCR" within the next several days.

"The name 'Intercardia' has become obsolete," Love said. "We have four programs outside the cardiovascular arena. But so much attention is being paid to Bextra that it was difficult to get that message across. This now allows us to move to a bigger area than just cardiovascular."

Intercardia's stock (NASDAQ:ITRC) closed Friday at $4.625, down 6.25 cents per share. Interneuron (NASDAQ:IPIC) gained 40.62 cents to close at $4.25.