By Mary Welch

In an agreement worth up to $95 million, Alexion Pharmaceuticals Inc. and Procter & Gamble Pharmaceuticals (P&G) will develop and commercialize Alexion's lead C5 complement inhibitor drug for patients undergoing cardiopulmonary bypass (CPB) during coronary artery bypass graft surgery.

Alexion, of New Haven, Conn., will get $10 million up front, and "one-fourth to one-third" of the $95 million in guaranteed research fees and other payments, said Leonard Bell, the company's president and CEO.

"Of course, some of the money is in hitting clinical milestones, and since we're pretty far along already in trials, we'll be hitting many of those milestones pretty quickly," he said. "In addition, P&G will be paying for all clinical development costs, which should run between $70 million to $90 million."

For its money, Cincinnati-based P&G (which is part of the consumer-goods firm Procter & Gamble Co., also of Cincinnati) will get worldwide development and marketing rights. Alexion retains the right to commercial manufacturing, as well as co-promotion rights in the U.S.

The deal calls for development efforts to concurrently assess 5G1.1-SC in settings of coronary artery bypass graft (CABG), angioplasty and other acute cardiovascular indications, such as myocardial infarction and unstable angina, as well as other applications. Alexion will take the lead in some of the development and indications, P&G in others, and then the two companies will come together to oversee the compound's road to commercialization.

Collaboration To Pursue Development Of 5G1.1-SC

5G1.1-SC is a bacterially produced, humanized single-chain antibody. The C5 complement is at the midpoint of the complement cascade, and the drug is designed to rapidly penetrate tissue and stall potentially damaging inflammation during procedures that require the use of a heart-lung machine.

Because bypass procedures leave the heart and lungs without blood flow and significantly reduce blood flow to the rest of the body, patients undergoing them can suffer heart damage. In addition, CABG surgery carries the risk of small emboli - pieces of fat, artery, calcium and air bubbles - traveling to the brain, blocking blood flow and causing cognitive deficits. Many patients also suffer postoperative bleeding.

According to the American Heart Association, about 1 million patients suffer a heart attack each year; about 400,000 undergo angioplasty procedures; and about 500,000 CPB procedures are performed in the U.S. In excess of $20 billion is spent annually on CABG surgery and CABG-related medical care in the U.S. alone.

Earlier this month, Alexion started dosing 500 patients undergoing CPB during CABG surgery in a Phase IIb trial. The multicenter, double-blinded, placebo-controlled study is designed to augment and extend earlier findings regarding the safety profile and pharmacokinetics and its efficacy in reducing the life-threatening inflammatory complications that can be triggered by CPB procedures.

Other endpoints will be the reduction of cardiac complications and brain damage following surgery.

Two doses of 5G1.1-SC will be given to patients who are undergoing CABG or CABG plus valve replacement surgery. Each patient will be studied for three months. Results from Phase I/II and Phase IIa CPB studies completed last year showed that 5G1.1-SC significantly reduced cardiac damage, cognitive deficits and blood loss in such patients.

Alexion also recently completed dosing of 5G1.1-SC in a Phase I study designed to support this CABG trial, as well as an expected heart-attack trial. Alexion's preclinical surrogates for 5G1.1-SC were demonstrated to substantially reduce the myocardial infarction resulting from coronary ischemia in a variety of experimental models of heart attack and angioplasty.

Enrollment For Phase IIb CPB Study Pegged At 1,000

Alexion and P&G intend to enroll more than 1,000 candidates in the Phase IIb study, before filing a new drug application and starting Phase III trials in 2001.

"The aim is to incorporate a large number of patients and to identify other regimens of treatment - to go as broad and deep as possible - in order to enhance the likelihood of early success and minimize the likelihood of missing correct endpoints of the drug," Bell said.

The P&G partnership has other benefits to Alexion outside of 5G1.1-SC.

"Not only does it allow us to move quicker toward development and commercialization of 5G1.1-SC, but all of our programs benefit substantially," Bell said. "It allows us to move our other compounds quicker toward development, and our burn rate is decimated. We will be at near cash-flow neutral over the next two years. That's a different statement than I would have made last week. When you're near cash-flow neutral, that's a good position to grow a company on."

Another C5 inhibitor, 5G1.1, a longer-acting, double-chain, humanized antibody, is in Phase I trials for rheumatoid arthritis and lupus. Published reports of its preclinical studies showed that 5G1.1 not only improved survival and reduced kidney damage in models of lupus, but also reduced clinical symptoms and disease progression in rheumatoid arthritis.

In addition to its C5 complement inhibitors, Alexion is developing Apogen T-Cell Therapeutics, which target cardiovascular and autoimmune disorders, and xenografts for organ transplant.

Alexion's stock (NASDAQ:ALXN) closed Tuesday at $14.875, down $1.187. n