By Randall Osborne

To push ahead with its development of drugs that regulate neurotransmitters — including Ergoset, a lead product for Type II diabetes and obesity — Ergo Science Corp. collaborated with Johnson & Johnson (J&J) in a deal potentially worth more than $40 million.

Under terms of the agreement with The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil Pharmaceutical Inc. (units of New Brunswick, N.J.-based J&J), Ergo Science gets a $10 million license fee plus a $10 million equity investment in common stock by the Johnson & Johnson Development Corp.

Ergo Science will share equally with J&J the costs of developing and commercializing Ergoset and any other products based on Ergo Science's Neuroendocrine Resetting Therapy (NRT).

"We're looking at several other things in the laboratory," said Donna LaVoie, spokeswoman for Ergo Science.

Ergo Science will receive another $20 million in milestone payments from J&J if the FDA clears Ergoset for marketing. Last October, the FDA accepted for filing Ergo Science's new drug application (NDA) for Ergoset tablets in the treatment of Type II diabetes. An FDA advisory panel is expected to review the NDA the first half of this year.

Ergoset Variation On Market For Parkinson's

More milestones may be paid by J&J as regulatory objectives are reached with Ergoset for diabetes and obesity in the U.S. and overseas.

Ergoset, taken orally once per day, is a fast-release formulation of bromocriptine, a dopamine-receptor agonist. The diabetes application of the drug was developed with NRT technology, based on research showing that daily activity patterns of neurotransmitters can be controlled to normalize glucose and lipid metabolism.

In the Phase III trials, Ergoset was given to subjects at 8 a.m. "Timing is the key," LaVoie said.

In July, Ergo Science began a 400-subject Phase II clinical trial with Ergoset in obesity, expected to finish early next year.

Bromocriptine already is marketed by Novartis AG, of Basel, Switzerland, as Parlodel, at much higher doses, for Parkinson's disease.

Ergo Science may change the trademark name of its formulation before marketing to avoid confusion with another drug, Ergostat (ergotamine), which is used to treat migraine headaches.

Ergo Science's stock (NASDAQ:ERGO) closed Tuesday at $16.625, up $0.375. *