By Frances Bishopp

Biogen Inc. has agreed to pay CV Therapeutics $16 million in up-front payments to develop and sell CVT-124, a novel therapeutic for the treatment of edema associated with congestive heart failure expected to enter a multi-center Phase II clinical trial next month.

CV Therapeutics' stock (NASDAQ:CVTX) gained $1.875 Monday, closing at $10.

Under terms of the agreement, Biogen, of Cambridge, Mass., and its wholly owned European subsidiary, Biotech Manufacturing Ltd., will receive exclusive worldwide rights to develop and sell CVT-124. Biogen and CV Therapeutics, of Palo Alto, Calif., will participate in developing the drug, but Biogen will pay all costs of commercializing the product.

Biogen's up-front payment will include a $5 million cash payment, a $7 million equity investment of CV Therapeutics' stock at $10.45 per share, advance funding of a development milestone and partial access to a line of credit.

Additionally, Biogen will pay CV Therapeutics milestone payments and royalties on clinical progress and product sales respectively. Further financial details were not disclosed.

CV Therapeutics' lead product, CVT-124, is a highly selective adenosine A-receptor antagonist. In the Phase I trial, the company reported the small molecule was safe and well tolerated and, although the Phase I trial was primarily designed to study the compound's safety profile, its potential clinical utility was demonstrated by statistically significant, dose-related increases in sodium and uric acid excretion, with only minimal losses of potassium.

The key to CVT-124, Lou Lange, chairman and CEO of CV Therapeutics, told BioWorld Today, is that it is not only potent, but highly selective and has minimal inhibition on the A2 receptor. "CVT made a discovery on the role it [CVT-124] plays in kidney physiology to block the absorption of salt and water at really the most efficient site in the kidney, the proximal tubule side, where no other diuretic really functions well," Lange explained.

The Phase I/II study in normal volunteers, Lange said, demonstrated intravenous administration of CVT-124 promotes loss of sodium from the kidney, without a significant decrease in potassium, which is the opposite of what all diuretics would do. "CVT-124 had a different side effect profile theoretically," Lange said, "but also because it had that affect, we know that it acts proximally, because uric acid is handled only proximally in humans. CVT-124 acts at that novel proximal site, which is really the Achilles heel of the whole current diuretic market. Nothing works there."

Kathryn Bloom, director of investor relations at Biogen, said her company sees a promising opportunity in the development of the product which has the advantage of being a late-stage therapeutic focusing in a large and under-served market. "This is a very attractive combination for Biogen," Bloom said. "CVT-124, which has a novel mechanism of action, has a potential to have a major impact in the treatment and management of heart failure."

Congestive heart failure, a chronic, progressive disease affecting approximately 4 million to 5 million people in the U.S., is increasing at 10 percent a year, primarily due to the aging population as well as improved survival in heart disease patients.

Edema, or fluid retention in the lungs and extremities, is a significant symptom of the disease, which can lead to increased morbidity and need for hospitalization. In its most severe form, congestive heart failure results in a 50 percent one-year mortality rate.

The Phase II study, Bloom said, will be a double-blind, placebo-controlled multi-center trial designed to study to safety and efficacy of increasing doses of CVT-124 in patients with congestive heart failure at three centers in the U.S.

Analyst Craig Parker, of J.P. Morgan Securities Inc., of New York, said Biogen is a good partnering choice for CV Therapeutics in that its pipeline is "a bit thin" with only one product on the market currently. Biogen markets Avonex for treatment of relapsing forms of multiple sclerosis.

"Biogen will be highly motivated to get this product to the market as quickly as possible," Parker said.

Tim Wilson, an analyst with UBS Securities Equity Research, of New York, said the collaboration will allow CV Therapeutics to redirect its cash position toward its other drug, ranolazine, which will enter Phase III trials later this year.

Ranolazine was licensed from Palo Alto, Calif.-based Syntex, an affiliate of Roche Holding Ltd. Ranolazine is a novel piperazine acetamide that affects the metabolism of the heart muscle so that it uses its available oxygen supply more efficiently to meet its energy requirements. Ranolazine prevents angina without lowering heart rate or blood pressure.

Wilson estimated the total deal to be worth approximately $40 million with royalties for CV Therapeutics running between 10 percent and 15 percent depending on sales levels.

CV Therapeutics completed a $13 million private financing in May 1996. CV Therapeutics' cash on hand is approximately $34 million, a figure which includes the $16 million Biogen up-front payment.

Biogen's stock (NASDAQ:BGEN) closed Monday at $48.562, up $0.312. *