By Randall Osborne

Connetics Corp. scored a deal worth up to $14 million with Suntory Ltd. to develop and sell ConXn (recombinant human relaxin-H2) for scleroderma in Japan.

Under the terms of the agreement, expected to be made public today, Osaka, Japan-based Suntory will pay a $1.6 million license fee to Connetics, of Palo Alto, Calif.

"The balance is basically milestones, " said John Higgins, chief financial officer of Connetics. "The first is when we start our next trial in the U.S." A 15-to-20-center Phase III trial is expected to begin this summer.

Higgins declined to specify the amount of the milestone payments.

Suntory's pharmaceutical division, which will buy ConXn materials from Connetics, will fund development and commercialization in Japan, and pay royalties.

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

Scleroderma is characterized by thickening of skin, caused by swelling of fibrous tissue, with the threat of eventual spread to internal organs. Patients number only 5, 000 to 10, 000 in Japan, and only about 300, 000 in the U.S., 80 percent of whom are women.

"But it's horribly debilitating and life-threatening, and there's an enormous need, " Higgins told BioWorld Today. "It's as if we were to roll back the clock 12 years, before there were treatments for multiple sclerosis. These patients are, so to speak, on Death Row."

In the more severe, diffuse form of the disease -- which afflicts about 70, 000 patients -- the heart, lungs and liver become sclerotic. "Fifty to 70 percent of sclerotic patients die within five years, " Higgins said.

Even the non-severe patients have serious quality-of-life impairments, he added.

"They have trouble dressing, eating and bathing, " Higgins said. "They can't raise their hand to their mouth, and their mouth is so scarred over they can't open it, so they are forced to sip foods. They find themselves living in a hospital."

ConXn, if approved by the FDA, would be the only treatment for people with scleroderma. The annual treatment cost for patients using the drug has not been determined, Higgins said.

"Whatever drugs cost, the idea is to alleviate pain and suffering and keep people out of the doctor's office, out of the hospital, " he said.

The economic impact of scleroderma in the U.S. is about $1.5 billion, Higgins added.

"Drug therapy is going to be substantially less than a patient, hospital or insurer would pay, " he said.

The deal with Suntory covers only the scleroderma indication, and only in Japan. Higgins said ConXn may also work against organ fibrosis and as a remedy for infertility.

Relaxin, a hormone, binds to the endometrium, he explained.

"When it does that, it brings in vascular endothelial growth factor [VEGF], which stimulates blood vessel growth, " Higgins said. Research has shown the growth of blood vessels in the endometrium may enhance an egg's ability to implant there.

Suntory is no stranger to biotech deals. Last year, the company formed a joint venture company, called Suncos Corp., with Seattle-based Icos Corp. to develop recombinant platelet-activating factor acetylhydrolase as a treatment for inflammatory disorders such as asthma and acute respiratory distress syndrome. (See BioWorld Today, Jan. 17, 1997, p. 1.)

About two weeks ago, Connetics raised $10 million in a stock placement that doubled its available cash. The company is preparing to launch its stabilized foam formulation of betamethasone 17-alpha-valerate for psoriasis. (See BioWorld Today, April 15, 1998, p. 1.)

Connetics stock (NASDAQ:CNCT) closed Friday at $5, down $0.25. *