By Charles Craig

Pharmacia & Upjohn Inc. agreed to pay DepoTech Corp. $19 million for rights to sell its anticancer drug, DepoCyt, in all markets outside the U.S., including Canada, Europe and Japan.

DepoCyt is a sustained-release form of the chemotherapeutic agent cytarabine using DepoTech's lipid-based delivery system, called DepoFoam.

DepoTech, of San Diego, filed a new drug application (NDA) with the FDA in late April for clearance of DepoCyt to treat neoplastic meningitis, a usually fatal disease that occurs when cancer metastasizes to tissues surrounding the brain and spinal cord.

Edward Erickson, DepoTech's president and CEO, said Monday the FDA has completed a preliminary review of the NDA and confirmed it is "filable," which means the agency considers the application complete. The FDA also told DepoTech a review by the agency's Oncological Drug Advisory Committee (ODAC) may not be necessary.

"The FDA sees this [DepoCyt] as a new dosage form of an existing drug [cytarabine]," Erickson said. If an ODAC review is required, a hearing would be scheduled in December, he added, noting the committee's September meeting agenda is filled.

DepoCyt's sustained-release delivery system, DepoFoam, is designed to make cytarabine more effective with fewer administrations and reduced adverse side effects.

The product was developed in collaboration with Chiron Corp., of Emeryville, Calif., which has U.S. marketing rights to DepoCyt. DepoTech repurchased Canadian and European rights from Chiron in June for $13.7 million.

In the deal with Pharmacia & Upjohn, of Kalamazoo, Mich., DepoTech will receive $19 million in up-front cash and milestone payments. The amount of the initial cash payment was not disclosed. The milestones are tied to submission of marketing applications in Japan and Europe and DepoCyt approval in Canada, Europe and Japan.

DepoTech will manufacture DepoCyt for Pharmacia & Upjohn and will get an undisclosed percentage of net sales revenue.

Pharmacia & Upjohn, which initially registered cytarabine in the U.S., also will provide funds for drug approval submissions in all countries outside the U.S.

Erickson said data from the NDA in the U.S. will be used to support DepoCyt applications in Canada this summer and in Europe by the end of this year or early 1998. In Japan, the marketing submission will require a small safety study in addition to the data from the U.S. NDA.

DepoCyt, the lead product for DepoTech, has an estimated worldwide market potential of $200 million to $300 million a year for neoplastic meningitis. About 100,000 cancer patients worldwide are potential recipients of the treatment.

Neoplastic meningitis is associated with metastasis of solid tumors, leukemias and lymphomas. Methotrexate is standard treatment for the disease resulting from solid tumor metastasis. Cytarabine is used to treat neoplastic meningitis in leukemia and lymphoma patients.

The NDA for DepoCyt includes safety data from clinical trials involving patients with neoplastic meningitis caused by all three types of cancers. Efficacy data were supplied from results of a Phase III trial involving solid tumor cancer patients. In that study DepoCyt, which is being reviewed by the FDA under its accelerated approval guidelines, improved survival rates compared with methotrexate. A Phase IV trial is ongoing.

Additional efficacy data for DepoCyt were generated from Phase III trials involving leukemia and lymphoma.

DepoTech's stock (NASDAQ:DEPO) closed Monday at $13.75, down $0.688. *