LONDON -- Pharming NV, focused on the production of human proteins in the milk of transgenic animals, has signed an agreement with Gem Pharmaceuticals Inc. to develop lactoferrin as a neutralizing agent for the anticlotting agent heparin in open-heart surgery.

Under terms of the collaboration, Pharming, of Leiden, the Netherlands, and Gem, of Pelham, Ala., will share the costs of pharmaceutical development, while Gem will fund the clinical study program. Pharming will receive a milestone payment on first commercialization and royalties on worldwide sales excluding Europe, where Pharming will have marketing rights.

The anticlotting properties of heparin are crucial to successful open heart surgery, but after surgery it is essential that the blood regains its ability to coagulate. The neutralizing agent currently used, protamine sulphate, can cause allergic reactions and other side effects, which may be fatal.

The discovery that lactoferrin is effective in neutralizing heparin was made at the University of North Carolina at Chapel Hill, and rights to develop the drug for this and other indications were licensed by Gem in early 1998. Pharming is already developing human lactoferrin for infectious disease indications.

Clinical studies will begin in 1999, and the aim is to launch human lactoferrin for this indication in 2001. The companies say this is a significant market, with more than 400,000 patients each year undergoing open heart surgery in the U.S., and 200,000 in Europe. *