By Vicki Brower

Special To BioWorld Today

Protein Design Labs Inc. has struck yet another license agreement for the use of its antibody humanization technology — its sixth this year — with NeoRx Corp.

The deal includes a signing fee and potential milestone payments worth $2.9 million plus royalties. The license will allow NeoRx, of Seattle, to humanize its Avicidin cancer therapy for repeat dosing in colon, ovarian and prostate cancer patients.

Just a week ago, Protein Design Labs announced a patent license agreement with IDEC Pharmaceuticals Corp., its second, for a humanized antibody to treat steroid-resistant inflammatory diseases. San Diego-based IDEC agreed to pay Protein Design Labs $1.3 million plus royalties.

More good news came last Friday when Protein Design Labs and its partner, Roche Holding Ltd., of Basel, Switzerland, said the FDA's Biological Response Modifiers Advisory Committee will review Zenapax, Protein Design Labs' lead product, on Oct. 17 — less than three months after the companies filed the new drug application.

Protein Design Labs' stock has been steadily climbing since June when the FDA granted Zanapex, which is targeted for kidney transplant rejection, expedited review status. The company's stock (NASDAQ:PDLI) closed at $42 on Sept. 15, up from $32.50 in mid-June. The shares ended Wednesday down $1.125 to $41.125.

All these recent events seem to support Protein Design Labs' tripartite business strategy of developing its own pipeline, humanizing products for third parties, and granting patent protection to other companies under its fundamental U.S. and European antibody humanization patents.

Protein Design Labs has 19 relationships with 15 companies: 7 patent licenses, 8 humanization agreements and 4 product licensing arrangements. Most of these deals were inked after Protein Design Labs received its December 1996 U.S. patent for humanizing antibodies.

All told, the company, with over $160 million in cash and a burn rate of $1.1 million per month, is in an extremely strong position.

"Protein Design Labs has now established itself as probably the most successful biotech company in terms of how many partnerships it's been able to consummate," said New York-based Oppenheimer & Co. analysts Matt Geller and Sharon Seiler. They expect the company's partnerships will continue to proliferate, as well as increase in dollar value, pointing out the jump in price from IDEC's $1.3 million fee to the $2.9 million paid by NeoRx.

Protein Design Labs believes its U.S. and European patents cover most humanized antibodies; and apparently, so do numerous other biotech companies who — some grudgingly and some to insure their products reach market without being challenged — have paid for nonexclusive licenses to the technology.

"We interpret the fact that 18 companies have initiated European opposition proceedings concerning our patent to be a form of flattery," said Protein Design Labs President Jon Saxe.

Some companies, like IDEC, have hedged their bets by challenging the European patent and taking out licenses on the technology.

Zenapax For Multiple Indications

With two statistically significant Phase III Zenapax clinical trial results and no serious side effects, numerous analysts expect an easy and rapid approval of Zenapax (daclixmab) for kidney transplant rejection.

"In our opinion, the expedited review designation and earlier-than-expected FDA response, with an advisory panel meeting scheduled for October 17, reflects a high level of interest by the FDA in regards to Zenapax and its potential clinical benefits, particularly in light of the critical shortage of available donor organs," said Elise Wang, senior analyst at PaineWebber Inc., in New York.

In addition, she believes the decision to review Zenapax under the aegis of the Biological Response Modifiers Advisory Committee reflects an acknowledgment of the growing importance of biologics and next-generation humanized antibodies.

Ms. Wang noted the same committee reviewed IDEC's monoclonal antibody, Rituxan, for non-Hodgkin's B-cell lymphoma in late July, and unanimously recommended it for approval. IDEC developed the drug in association with Genentech Inc., of South San Francisco.

Analysts also point out that, unlike 1995 clinical trial results for Zenapax for graft vs. host disease, the data for kidney transplant rejection were solid, showing a reduction in acute rejection episodes when used with double and triple immunosuppressive therapies of 40 percent and 37 percent, in contrast to immunosuppressive therapies with placebo in patients six months post-transplant.

"With this data, we believe Zenapax represents the first immunosuppressant to show a marked reduction in acute rejection episodes without the increased side effects associated with broad spectrum immunosuppressants," said Wang.

The drug is produced with Protein Design Labs' SMART antibody technology and targets the interleukin-2 receptor on activated T cells, blocking it and preventing the cells' attack on the donor organ.

To date, the FDA has approved only two monoclonal antibodies — New Brunswick, N.J.-based Johnson & Johnson's Orthoclone OKT3, also for kidney transplant rejection, and Malvern, Pa.-based Centocor Inc.'s ReoPro for preventing blood clots. The former is a mouse antibody, whereas the latter is a chimeric antibody.

Zenapax also is being developed by Roche in proof-of-concept trials for uveitis and tropical spastic paraparesis (a model for multiple sclerosis), with psoriasis to follow. Protein Design Labs also is testing it for certain hematologic cancers. *