By Randall Osborne

The 10-year research deal between Regeneron Pharmaceuticals Inc. and Procter & Gamble has been sweetened by Procter & Gamble's pledge of $15 million more, as the companies aim to develop a drug against obesity related to Type II diabetes.

Cincinnati-based Procter & Gamble paid $2.5 million up front to Regeneron, of Tarrytown, N.Y., and will pay another $2.5 million by the end of the year, said Murray Goldberg, Regeneron's vice president of finance and administration and CFO.

More money may come in milestone payments to Regeneron as it develops ciliary neurotrophic factor (CNTF) and Axokine, a patented, second-generation CNTF, for weight reduction. Neither molecule previously was part of the companies' collaboration, and other uses — for treatment of eye and nervous system diseases — are excluded from the collaboration.

Procter & Gamble already had committed to pay as much as $155 million in support of research programs by Regeneron.

In December 1996, Procter & Gamble bought $10 million in equity and agreed to pay Regeneron up to $18.75 million over five years for research into muscle diseases and disorders.

A month later, Regeneron's lead candidate in other research, brain-derived neurotrophic factor for amyotrophic lateral sclerosis, failed in a pivotal Phase III trial conducted in collaboration with Amgen Inc.

Procter & Gamble kept the faith, vowing in May 1997 to pour another $135 million into Regeneron over the next decade. (See BioWorld Today, May 14, 1997, p. 1.)

The original Procter & Gamble collaboration in 1996 had nothing to with the drug candidate that failed shortly afterward, Goldberg noted. "We had done the muscle deal and they saw what we were capable of," he said.

Regeneron was not hurt by that Phase III failure — and actually was helped by an earlier one. In 1994, the company scrapped Phase III trials of CNTF for amyotrophic lateral sclerosis because the primary endpoint, muscle strength, was not met. Researchers noted, however, that patients injected with CNTF lost weight.

"We gained insights, particularly in the parallel with leptin," Goldberg said. Leptin is a protein secreted by fat cells. It plays a role in signaling the brain to lessen its demand for food. The majority of obese people show high circulating levels of leptin, but these patients apparently are resistant to it.

Preclinical experiments have established that obesity and diabetes may result from a deficiency of leptin or from the dysfunction of the receptor that recognizes it. Amgen, of Thousand Oaks, Calif., is conducting clinical trials with leptin for obesity and Type II diabetes.

Axokine and CNTF are structurally related to leptin, and their signaling components are the closest homologues to leptin's. Areas of the hypothalamus believed important in mediating leptin's effect also bear receptors for Axokine and CNTF, and respond similarly to them.

Experiments with mice showed CNTF was even more effective than leptin at making them lose weight. It may work by binding to the hypothalamus' receptor and stimulating the signaling pathways that suppress food intake.

As of June 30, Regeneron had $130 million in cash. The latest deal is not as significant as the May deal with Procter & Gamble, but will become more important as other research continues, Goldberg said. Procter & Gamble is supporting the bulk of Regeneron's discovery research and is picking up the tab for preliminary clinical studies to determine whether Axokine is safe and effective. Usually, the cost of clinical trials is split 50-50.

"Success is expensive," Goldberg said. "If we move into the clinic, we have to step up with our share of expenses. It's not that we're running out of money, but for a biotech company, you never have enough."

With Medtronic Inc., of Minneapolis, Regeneron is developing Axokine for potential treatment of Huntington's disease and other central nervous system diseases. Regeneron plans clinical trials of Axokine for retinitis pigmentosa, which causes degeneration of the retina and blindness.

Amgen, which owns an 18 percent stake in Regeneron, is collaborating with the company on additional human clinical studies of brain-derived neurotrophic factor and neurotrophin-3.

Regeneron's stock (NASDAQ:REGN) closed Tuesday at $11.188, up $1.375. *