By Mary Welch

Connetics Corp. signed a deal worth at least $40 million with Medeva plc, its second to develop and market ConXn (recombinant human relaxin-H2) for scleroderma.

London-based Medeva will be responsible for all development and commercialization activities in Europe, and will pay royalties on sales there. Last April, Connetics signed a $14 million deal with Suntory Ltd., of Osaka, Japan, to develop and sell ConXn for scleroderma in Japan.

Under the terms of the agreement, Medeva will pay $8 million up front - including a $4 million development fee and a $4 million equity investment - $17 million in milestone payments based upon development progress in the U.S. and Europe, and $5 million for the development and approval of each indication in Europe besides scleroderma.

In addition, Medeva will pay half of the estimated $20 million product development costs in the U.S. and share U.S. co-promotion rights with Connetics for up to five years. Medeva also will purchase relaxin materials from Connetics, of Palo Alto, Calif.

"It's a $40 million to $50 million deal and we're pleased that we only licensed European rights. We will keep the U.S. rights ourselves," said John Higgins, Connetics' chief financial officer. "We believe that this could be a significant drug with a potential of $1 billion, if we can expand the label. We're pleased that Medeva, as well as our Japanese partner, Suntory, wants to be in on the opportunity."

The relaxin product is one of two Connetics licensed from South San Francisco-based Genentech Inc. The other product, gamma interferon for atopic dermatitis - failed in Phase III trials. (See BioWorld Today, Aug. 28, 1997, p. 1.)

Relaxin decreases the amount of collagen production by inducing the growth of collagenase, an enzyme that breaks down collagen. Because of those effects on collagen, relaxin was developed as an antifibrotic agent, with scleroderma being a quintessential disease of excessive fibrosis.

Scleroderma is characterized by thickening of skin, caused by the swelling of fibrous tissue, with the threat of eventual spread to internal organs. Patients number between 5,000 and 10,000 in Japan, between 250,000 and 300,000 in the U.S, and between 200,000 and 250,000 in Europe. About 80 percent of all patients are women of childbearing age.

"It's an excessive hardening of the skin, and in the more severe cases, a hardening of the internal organs as well," Higgins said. "It can be life-threatening because the esophagus scars up, which makes it hard to swallow; the lungs scar up, making it hard to breath; and the heart scarring makes it hard for the heart to pump blood. There is no cure and the cause is unknown. But between 50 to 70 percent of sclerotic patients die within five years."

The next step for Connetics and Medeva is to start Phase III, most likely within the next five to six weeks. The trials will involve 15 centers and 200 patients, who will receive treatment for six months. The endpoints will be similar to the Phase II trials.

The primary endpoint will be the Modified Rodnan Skin Score, a measurement of the hardening of the skin due to excessive fibrosis. "Essentially, the physicians do a pinch test at 17 points around the body. The hardening is judged on a scale of zero to three, with three being hard and scar-like," Higgins said. In addition, there are about a dozen secondary endpoints, such as quality of life and the ability to draw breaths and open one's mouth.

Phase II results, released in June 1997, showed that in the group receiving a dose of 25 micrograms per kilogram per day, statistical significance was found as skin scores improved 31 percent. Positive trends were seen in all other parameters. The double-blind, placebo-controlled study involved 64 patients randomized into one of two treatment groups or placebo. All patients had severe systemic scleroderma for at least one year, which affected internal organs. Patients received a subcutaneous continuous infusion of the drug via a small, portable insulin pump for 24 weeks. (See BioWorld Today, June 6, 1997 p. 1.)

Connetics intends to investigate ConXn for at least two other indications as well. Phase I trials for infertility are planned for the second quarter of this year, and the company's strategy is to start preliminary tests on rats for the cardiac fibrosis indication. The company believes the infertility indication may be successful because relaxin also has an angiogenic property; it increases the production of vascular endothelial growth factor, thus stimulating blood vessel growth. Research has shown the growth of blood vessels in the endometrium may enhance an egg's ability to implant there.

Connetics believes both properties of relaxin - its angiogenic feature and its antifibrotic trait - will come into play when treating the scarring of the heart. When a person suffers a heart attack, tissue is torn and damaged. Connetics believes that ConXn would not only reduce the scar tissue (its antifibrotic action), but also induce the growth of blood vessels (its angiogenic features).

Down the road, Connetics may investigate ConXn for lung fibrosis as well.

If the company were successful in developing those two indications, Medeva would pay $5 million for the rights to each indication. Suntory has licensed the rights only for the scleroderma indication, although the company may want to license additional rights later, Higgins said.

Separately, Connetics is awaiting FDA approval for Luxiq (betamethasone), its mid-potency mousse-formulation steroid designed for moderate cases of psoriasis. The new drug application was filed last February. "We're waiting for approval and we're ready to launch any time," Higgins said.

Its other product, Olux (clobetasol propinate), is intended for severe psoriasis and other scalp dermatoses. The company is currently preparing the new drug application and expects to file by summer, Higgins said.

Connetics' stock (NASDAQ:CNCT) closed Tuesday at $6.25, up 75 cents. n