By Frances Bishopp

Aiming for a major position in the neurosciences field, Canadian company Allelix Biopharmaceuticals Inc., has purchased Trophix Pharmaceuticals Inc. for $23 million, adding three new neuroscience products and 30 new employees to its roster.

The two companies have executed a letter of intent whereby Allelix, of Mississauga, Ontario, will acquire 100 percent of the outstanding shares of the privately owned Trophix for 2.5 million Allelix common shares and $3 million in cash.

Further payments of up to $4 million will be made in Allelix common shares upon achievement of certain clinical and business milestones. The transaction, expected to be completed by July 31, 1997, is subject to stock exchange and regulatory approval, execution of definitive agreements and related matters.

The new company will operate as Allelix Neurosciences Inc. and be based in New Jersey. It will be approximately the same size as Allelix Protein Therapeutics, Allelix's other major division.

"With this merger, we hope to reinforce our position as a leading factor in drug discovery and development in the neuropharmaceuticals/neuroscience arena," Graham Strachan, president and CEO of Allelix, told BioWorld Today. "It's a great growth opportunity for both companies in an integrated fashion."

Allelix, which develops products for the treatment of migraine, addiction, cognitive impairment, schizophrenia and other neurological conditions, will add to its line-up Trophix's product for schizophrenia and dementia and two other products for neuropathic pain and spinal cord injury. The product for schizophrenia is slated to enter Phase I clinical trials this year and the other two products will enter Phase I trials by the end of 1998.

South Plainfield, N.J.-based Trophix, founded in 1993 to develop drugs for diseases of the central nervous system, is collaborating with Janssen Pharmaceutica N.V., of Beerse, Belgium, on the product for treatment of neuropathic pain. The focus of the collaboration is on genes that code for and regulate specific sodium channels.

Both companies, explained Jeffrey McKelvy, chairman and CEO of Trophix, have cutting-edge technology in the neurosciences arena, but the core strength can be seen at the neuroreceptor and neurotransporter levels. Neuroreceptors are the sites where neurotransmitters trigger neural action; neurotransporters are the sites that inactivate neurotransmitters.

"There has never been a company configured to take advantage of all of these elements of neurotransmission," McKelvy said, "which should result in novel approaches to regulating the synapse, which is the central communication point between nerve cells, therefore the site that is targeted for drug action."

McKelvy went on to point out that drug development experience in the central nervous system will be added from the Trophix side, which creates a merged company that has the expertise to discover drug candidates and take them through Phase II clinical trials. Allelix's migraine and cocaine addiction products will move into Phase I testing possibly by the end of the year or early next year.

Outside of the neurosciences group, Allelix is developing several protein therapeutics products, such as ALXI-II, a recombinant human parathyroid hormone (PTH) which has just completed Phase II trials for treatment of osteoporosis and ALX-0600, an analogue of Glucagon-like peptide 2, which is in preclinical testing for short bowel syndrome, and other gastrointestinal disorders.

Allelix is in partnership with Eli Lilly & Co., of Indianapolis, to develop compounds that act at various excitatory amino acid receptors and with Hoechst Marion Roussel, of Bridgewater, N.J., for compounds to treat schizophrenia. Allelix has several other joint ventures with Pharm-Eco Laboratories, of Lexington, Mass., for development of the cocaine product and cognitive enhancement product.

After the merger, Allelix Biopharmaceuticals plans to have seven products in the clinic by the end of 1998, three of which could be in Phase II clinical trials.

McKelvy will serve as president of the newly created division and senior vice president of the corporation. *