By Jim Shrine

Special to BioWorld Today

Cytogen Inc. found a new marketing partner for Quadramet Thursday as part of an $8 million deal expected to improve sales of the treatment for bone pain.

Cytogen, of Princeton, N.J., said it received an up-front payment of $8 million from Berlex Laboratories, a Wayne, N.J., subsidiary of Berlin-based Schering AG. Half of that payment will go to former marketing partner DuPont Pharmaceutical Co. to secure Quadramet manufacturing for five years.

Cytogen will receive royalties on sales of Quadramet and milestone payments if certain sales goals are reached. Berlex also committed to funding trials designed to expand indications of Quadramet, a radioactive isotope combined with a targeting agent that was launched in June 1997 for treating cancer-related bone pain.

Sales of Quadramet have been slow, and in 1997 were lower than the minimum royalty obligation DuPont had with Cytogen, said H. Joseph Reiser, who was named Cytogen's president and CEO in August after 17 years at Berlex.

"The concern has not been product performance but product positioning," Reiser told BioWorld Today, explaining that DuPont's sales emphasis was in the area of nuclear medicine. "We believe the primary audience is the medical oncology specialist."

Reiser said the partnering choice came down to four serious candidates and Berlex was selected for three reasons: it already is marketing to medical oncologists; it committed to expanding the product's current indication as well as assessing new indications; and Berlex is active in patient and disease management programs.

"We needed a partner that could not only market the product effectively but also was willing to commit to further clinical development," Reiser said.

Quadramet is being studied in early-stage trials as a treatment for certain cancers and in the area of refractory rheumatoid arthritis. Cytogen is responsible for Phase IV studies assessing Quadramet in pediatric uses as well as in renally impaired patients.

"This marketing agreement is a significant step in the refocusing of Cytogen toward its future," Reiser said. "In the past it was research oriented. The emphasis on product performance has not been prioritized as effectively."

Cytogen has three approved products, the other two being the diagnostics ProstaScint for prostate cancer and OncoScint for colorectal and ovarian cancers. Both are monoclonal-antibody-based imaging agents.

The Berlex deal is a large piece of Cytogen's transformation since June, when the Quadramet marketing deal with DuPont was terminated. On June 30, Cytogen reported only $3 million in cash and was burning about $1.5 million per month.

Since then, the company sold its 49.9 percent share in Targon Corp. to Elan Corp. plc for $2 million and got another $2 million from Elan, of Athlone, Ireland, in exchange for a convertible promissory note; ceased operations of its Cellcor subsidiary, part of a move that cut staff from about 140 to 105; and secured a $12 million equity line of credit from Ireland-based Kingsbridge Capital.

Reiser said the burn rate is expected to be cut by at least half by the end the year.

"That was very much my charge, to take hold of the process and impact not only the burn rate but also the partnering and financing opportunities," Reiser said. "We believe this [deal with Berlex] will carry us forward with the anticipation of our stated goal of reaching profitability by the end of 1999. We have a plan in place."

Part of that plan, he said, is to reposition the product line. That includes not giving up on OncoScint, even though the company said in its August 10-Q filing that sales have not been material and were not expected to be in the future. Lessons learned since the February 1997 launch of ProstaScint could help resurrect OncoScint, Reiser said, such as the increase in Partners in Excellence sites that are qualified to offer ProstaScint scans. ProstaScint sales were $1.5 million in the second quarter.

Cytogen's stock (NASDAQ:CYTO) gained $0.156 per share Thursday, or 13.1 percent, to close at $1.344. *