SYDNEY, Australia - Amrad Corp. has signed a license agreement potentially worth more than US$50 million with Paris-based pharmaceutical giant Rhtne-Poulenc SA for the rights to a gene useful in treating the heart condition atherosclerosis.

Amrad announced last week that the agreement with RPR Gencell, the gene therapy division of Rhtne-Poulenc Rorer, of Collegeville, Pa., could mean up to US$50 million in milestone fees and license payments from RPR.

The payments are to be shared between Amrad and the institution that originally discovered the gene, the Ludwig Institute for Cancer Research, in Melbourne.

The gene is vascular endothelial growth factor B (VEGF-B), which Amrad said holds "great promise" as a new, more effective approach to treating patients with atherosclerosis, in which the arteries leading to the heart become clogged.

RPR has effectively picked up the rights to VEGF-B, after they were given up by Collateral Therapeutics Inc., of Palo Alto, Calif. Collateral acquired the licensing rights to the gene in 1994, in an agreement reported at the time to be worth A$8.6 million (US$5.5 million). The company is believed to have paid A$2.7 million before the agreement lapsed.

Amrad managing director John Grace said Collateral chose not to make a milestone payment last year, so the agreement lapsed.

The VEGF-B gene project, called AM132 within the company, was one of Amrad's "most promising research efforts," and Amrad was confident RPR was the best collaborator to assist in further developing the gene, Grace said.

Two teams working independently discovered and characterized the VEGF-B gene. One was based at the Queensland Institute of Medical Research, one of the institutes which originally helped create Amrad to commercialize Australian research, and which is still described as a member institute. The other team was based at the Stockholm branch of the Ludwig Institute for Cancer Research.

Further research on characterizing the VEGF-B gene is in progress at Amrad's Burnley Laboratories and the Ludwig Institute.

When Amrad announced the deal early last week, investors boosted its share price by A$0.20 to A$1.50. By the end of the week the share price was A$1.55. Some of the buoyancy of the price may be due to the additional announcement last week of a distribution agreement for the company's range of rapid point-of-care diagnostic kits for hepatitis B.

Under the agreement, London-based Glaxo Wellcome plc will purchase Amrad's matchbook-sized kits for marketing in the Asia Pacific region under the Glaxo name in conjunction with its new treatment for hepatitis B, called Zeffix.

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