By Mary Welch

Aronex Pharmaceuticals Inc. entered a $40 million deal with Abbott Laboratories for worldwide rights to Nyotran, Aronex's injectable, liposomal formulation of nystatin for the treatment of systemic fungal infections.

"Abbott's a first-class marketing company with a worldwide presence, and we believe that Abbott will truly make Nyotran a player in the market," said Geoffrey Cox, chairman and CEO of Aronex. "It is also helpful that they are very solid in the field of anti-infectives."

Enrollment in a Phase III trial of Nyotran is expected to finish by next month, and the company intends to file a new drug application (NDA) with the FDA by mid-1999.

Under the agreement, Aronex, of The Woodlands, Tex., will receive $2.85 million up front, followed by milestone payments, developmental support and royalties. Abbott, of Abbott Park, Ill., also purchased 837,989 shares of Aronex's common stock for $3 million in cash.

Abbott will be responsible for marketing Nyotran upon FDA approval and has an option to manufacture the drug. Aronex retains the opportunity to co-promote Nyotran within the U.S. and Canada for at least two years.

In September 1997, Aronex signed an agreement with Grupo Ferrer Internacional SA, of Barcelona, Spain, to commercialize and market Nyotran in Spain and Portugal. Cox said Aronex has altered its agreement with Grupo Ferrer, allowing Abbott to coordinate marketing Nyotran in the Iberian Peninsula.

Nystatin, a traditional anti-fungal therapy, is used only for topical infections. "It has been too toxic to be taken systemically," said Cox. "That's why we are confident that Nyotran will be so successful. For the first time, our liposomal formulation allows nystatin to be injected. Nyotran has a low toxicity profile, a broad spectrum of activity, and has demonstrated activity against a number of resistant organisms."

As a result of side effects of cancer chemotherapy and other conditions that compromise the immune system, about 300,000 systemic fungal infections are diagnosed worldwide each year. The annual market for anti-fungal drugs was $1.5 billion in 1997.

Nyotran belongs to a class of drugs known as polyene derivatives, which include amphotericin B, the standard treatment for systemic fungal infections.

The Phase III study for presumed fungal infections is evaluating Nyotran against amphotericin B in the empiric treatment of presumed fungal infections in neutropenic patients. It includes more than 500 immunocompromised cancer patients with presumed systemic fungal infections.

Nyotran is also in a Phase III trial to evaluate its effectiveness against Cryptococcal meningitis, and in Phase II trials to test it in an Aspergillus salvage indication. Data from a recent Phase II study presented in September indicated that 60 percent of the patients suffering from life-threatening Candida infections resistant to other antifungal agents were successfully treated with Nyotran.

Aronex also released its third quarter 1998 results Monday, reporting a net loss of $6.1 million, or $0.39 per share, compared with a net loss of $6 million, or $0.40 per share, for the same period last year. Total quarterly revenues were $401,000, down from $785,000 for the third quarter 1997. The company has $16 million in cash and investments.

Aronex's stock (NASDAQ:ARNX) closed Monday at $3.375, down $0.562. n

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