By Randall Osborne

Capitalizing for the second time on its work with the melanocortin receptor pathway, Trega Biosciences Inc. signed a deal with Novartis AG worth up to $39 million for the development of one product.

"All products have milestones associated with them, and if we have two or three successes, this is a deal worth $50 million to $75 million," said Robert Whitehead, CEO of San Diego-based Trega.

The research agreement is focused on diseases associated with the MC-4 receptor — especially obesity and Type II diabetes. Of the aggregate funding amount, up to $19 million is guaranteed.

From Basel, Switzerland-based Novartis, Trega gets an equity investment at Trega's option plus payments that include undisclosed funds for past research, financial support, future study, milestones and royalties on products.

Under terms of the deal, Trega will screen its combinatorial chemistry libraries and confirm activity and function of drug candidates, collaborating with Novartis to conduct preclinical testing. A committee composed of staffers from both companies will review the results of research, and Novartis will clinically develop and commercialize products.

Formerly Houghten Pharmaceuticals Inc., Trega last year entered a $25 million deal with Ono Pharmaceutical Co. Ltd., of Osaka, Japan, to develop treatments for inflammatory diseases. The collaboration centers on the MC-1 receptor, also known as the alpha melanocyte stimulating hormone receptor. (See BioWorld Today, June 20, 1997, p. 1.)

"There are five of these receptor subtypes identified, and there's not a lot known about all of them," Whitehead told BioWorld Today. The more closely investigated have been MC-1 and MC-4, he added.

Included in the Novartis deal is research on treatments for Syndrome X, which is a single disease consisting of obesity, Type II diabetes and hypertension in one patient.

Larry Muschek, president of research and development for Trega, said about 20 percent of patients with obesity and diabetes also suffer from hypertension.

"When a person gets heavier, you have more of a tendency to develop hypertension, and when you put those three together, you have much more of a problem with organ damage," Muschek said. Common among such patients are "bad cardiovascular outcomes," he added.

Trega's stock (NASDAQ:TRGA) closed Tuesday at $4.562, up $0.187. *