By Mary Welch

AutoImmune Inc. signed a deal to develop oral formulations of two drugs developed by Teva Pharmaceuticals Industries Ltd., which would result in up to $20 million in milestone payments to AutoImmune upon product approvals.

"Teva has a reasonably successful drug, Copaxone, already on the market for multiple sclerosis (MS), but it is an injectable drug," said Robert Bishop, president and CEO of the Lexington, Mass.-based AutoImmune. "They were interested in developing an oral formulation, but they needed to license our patents in order to do that. Our patents are broad enough to cover the oral use of antigens for the treatment of autoimmune diseases."

The oral formulation of Copaxone (glatiramer acetate) already has been tested on animals for the MS indication and results were encouraging, Bishop said. It is expected the oral application will begin "at least Phase II trials" by year's end, he said.

The second licensed formulation is for myasthenia gravis, and Teva, based in Jerusalem, expects to start Phase I trials by the end of this year.

Deal Centers On Milestones, Royalties

Myasthenia gravis is an autoimmune disorder characterized by progressive muscle fatigue and weakness, particularly around the eyes, mouth, throat and limbs. The disease usually strikes people between the ages of 20 to 40. It results in loss of normal facial expression, as well as difficulty in swallowing, breathing and speaking. The disease is life threatening in about 10 percent of cases. The cause is not known and the use of anti-cholinesterase drugs to restore normal muscle function is the usual treatment.

AutoImmune will receive up to $20 million in milestone payments upon product approvals either by the FDA or the European Marketing Authority, as well as escalating royalties based on cumulative sales for all products. There was no up-front payment.

"We are very excited about the deal with Teva," Bishop said.

Biogen Inc., of Cambridge, Mass., has the leading drug in the MS field with Avonex (interferon beta-1a), and it also is taken by injection. Last week, Biogen signed a deal to apply San Carlos, Calif.-based Inhale Therapeutics Inc.'s pulmonary delivery system to that drug. (See BioWorld Today, Feb. 18, 1999, p. 1.)

Separately, AutoImmune is developing Colloral for rheumatoid arthritis.

"We are anxiously awaiting the Phase III results for rheumatoid arthritis, which should be ready this summer," Bishop said. "We completed enrollment of 772 patients this month at 45 centers. We are not partnered for Colloral. It's all ours."

Colloral (trinecol) is a natural source of Type II collagen taken from the breastbone of a chicken. AutoImmune expects to file a biologics license application (BLA) in the first quarter of 2000.

AutoImmune's stock (NASDAQ:AIMM) closed Tuesday at $2.187, down 12.5 cents.