By Debbie Strickland

With injectable and nasal formulations of calcitonin generating revenues upwards of $700 million worldwide, an oral version of the osteoporosis therapeutic hormone -- such as the one under development at Unigene Laboratories Inc., of Fairfield, N.J. -- would seem a surefire hit.

The Parke-Davis division of Morris Plains, N.J.-based Warner-Lambert Co. has signed a letter of intent to pony up more than $50 million in up-front and milestone payments for worldwide licensing of Unigene's formulation, which has passed Phase I trials. Additional royalties are possible on commercial sales, and a Warner-Lambert equity investment is also part of the deal.

"We believe that oral calcitonin has the potential to become a blockbuster drug," said Warren Levy, Unigene's president.

Under terms of the agreement, Warner-Lambert assumes responsibility for the development and marketing of the product, while Unigene will provide analytical support services and be the exclusive supplier of bulk calcitonin.

Unigene was founded in 1981 as a contract research company, and its first project involved calcitonin. By the mid-1980s, the company switched its focus to development of proprietary processes and compounds, devising an amidation process capable of producing a variety of peptide hormones.

"It used to be the case that what we had to offer was only the ability to make large amounts of calcitonin efficiently," Levy told BioWorld Today. "Now, however, we have the second piece of the puzzle, delivery of the peptide orally into the bloodstream. It's the two technologies together that give you the viable product."

Levy said the technologies could be adapted to other peptide drugs.

Unigene's calcitonin program also includes injectable and nasal formulations. The company, which is seeking partners for the other calcitonin products, has completed Phase III trials of the injectable form and plans this summer to file for marketing approval in the European Union.

Unigene's shares (NASDAQ:UGNE) closed Wednesday at $4.625, up $0.094. As of March 31, the company had cash and cash equivalents of $2.3 million and total assets of $14.75 million. The company's cash level fell $2.2 million in the first quarter. *