By Mary Welch

Avant Immunotherapeutics Inc. received a $6 million equity investment and license payment as Novartis Pharma AG exercised its option to license TP10 for use in the field of transplantation.

"We are delighted that Novartis decided to license TP10 and go ahead and develop the product, to have it become a clinical reality," said Una Ryan, president and CEO of the Needham, Mass., company. "It means that they have proof of principle, which is exciting."

Their association goes back to 1997 when Basel, Switzerland-based Novartis agreed to pay up to $25 million - including a $5 million up-front fee - for an option to license TP10. The deal covers only transplantation indications. Avant retains rights to all other indications, with the exception of Japanese rights to myocardial infarction and adult respiratory distress syndrome, which are covered under an agreement with Yamanouchi Pharmaceutical Co., of Tokyo, and SmithKline Beecham plc, of London. (See BioWorld Today, Oct. 16, 1997, p. 1.)

At the time of the original deal, TP10 was being developed by T Cell Sciences Inc., of Needham, Mass. T Cell Sciences later merged with Virus Research Institute Inc., of Cambridge, Mass., to form Avant. (See BioWorld Today, May 13, 1998, p. 1.)

The original deal called for Novartis to pay for the cost of supplies for two years with the caveat that Novartis would pay an additional $20 million in equity investments, licensing fees and milestones if it exercised its worldwide marketing rights option. The next milestone payment would come if Novartis takes TP10 into Phase I trials. Avant also could receive additional research funding and royalties on product sales.

With this payment, Avant has received $10 million from Novartis. Avant, however, will record the $6 million investment in the first quarter of 2000 rather than this quarter.

TP10, or soluble Complement Receptor 1 (sCR1), inhibits complement activation. Complement is a family of immune system proteins that helps identify and eliminate damaged tissue, contributing to the body's acute inflammatory response against disease, infection and injury.

Excessive complement activation has been implicated in acute respiratory distress syndrome, reperfusion injury following ischemic events, organ transplant rejection, multiple sclerosis, Alzheimer's disease, rheumatoid arthritis and lupus.

The compound has been in Phase I/II trials with 60 lung transplant patients. In preclinical studies, it showed that it increased the efficacy of heparin-bonded cardiopulmonary bypass circuits by limiting damage to the heart and improving post-operative outcome in pigs.

While Novartis will focus on TP10 xenotransplantation, Avant has other plans for the compound.

"We are currently in discussions with another company interested in developing TP10 for another indication," Ryan said. "We believe there are many uses for it, such as autoimmune diseases and cardiovascular diseases. Our focus, however, will be in pediatric cardiac surgery for children with congenital heart defects."

Avant's stock (NASDAQ:AVAN) closed Friday at $1.937, up 6.25 cents per share.