Schering-Plough Corp. has exercised its option to expand its 1992research collaboration with Corvas International Inc. to develop andcommercialize inhibitors of coagulation Factor Xa, a key enzyme inthe blood-clotting process.
For Corvas, the combination of both programs means a potential $80million in performance milestones and research payments and givesSchering-Plough an 8 percent equity position in Corvas, RandyWoods, president and CEO of Corvas, told BioWorld Today.
The current agreement calls for Schering-Plough, of Madison, N.J.,to make equity, license fee, research support and milestone paymentsto Corvas, of San Diego, totaling $40 million, if certain developmentmilestones are achieved and new therapeutics are successfullycommercialized. Royalties will be payable on products marketed.
The agreement calls for Schering-Plough to make an up-frontpayment of $7 million: a $2 million equity investment and $5 millionin prepaid funds for research expenses of which $1 million is paid ateach quarter. The $2 million equity investment comes in the form of250,000 shares of Corvas preferred stock at around $8 each, Woodssaid. On the anniversary of the option agreement in 1997, a $3million payment for research and development will be made toCorvas, he said.
The 1994 alliance called for Schering-Plough to help funddevelopment and commercialization of oral anti-thrombotic drugsbeing developed by Corvas for the prevention and treatment ofcardiovascular disease. It also gave Schering-Plough the option toexpand the program to cover Factor Xa.
This agreement provided for a $5 million equity investment in Corvasand another $5 million in research funding. Schering-Ploughpurchased 1 million shares of Corvas stock at $5 per share.
In January of 1996, Schering-Plough, which had already paid Corvas$14 million, elected to pay $1 million to extend its option untilDecember.
Corvas develops novel therapeutic agents that prevent and treat majorcardiovascular and inflammatory diseases by intervening early in thecoagulation process.
"We anticipate in the very near future that Schering-Plough willselect an oral thrombin which they will take into the clinic next year,Wood said, "but they are in charge of the development."
"Many people anticipated that the oral thrombin compound wouldhave been selected first, then the Factor Xa program," Woods said,"However, the Factor X a program had to be done contractually byDec. 14. They have a bit more time to make the decision on the oralthrombin compound."
Thrombogenesis, or clot formation, results from a complex sequenceof biochemical events, known as the coagulation cascade. Thetriggering event in the coagulation cascade is the binding of theserine protease enzyme Factor VIIa circulating in blood to tissuefactor, a receptor found on the surface of endothelial cells and whiteblood cells.
Once bound to tissue factor, Factor VIIa activates another enzyme,Factor Xa, which converts prothrombin to the enzyme thrombin. Theprotease thrombin initiates the production of fibrin, the major proteincomponent of the clot, at the rate of tens of millions of molecules persecond.
"Factor Xa is a small molecule and basically it is an enzyme thatblocks the blood clotting process in the coagulation cascade," Woodsexplained. "The advantage the Corvas, now Schering-Plough,compound has is it intervenes early in the cascade process as opposedto current therapy such as Coumadin. You don't get the excessivebleeding that is associated with other compounds currently in use."
"Without the excessive bleeding," he continued," you don't have todo the drug monitoring that increases the cost of therapy. Drugs suchCoumadin can take up to 72 hours to have an effect, therefore,physicians often use Heparin to get a faster response. Factor Xa hasthe potential to replace both of these two agents," Woods said. "Acompound such as this is also safer and might allow physicians totreat some patients they might not ordinarily treat."
Corvas also has a research and option agreement with Pfizer Inc., ofNew York, for the development and commercialization of neutrophilinhibitory factor (recombinant NIF), developed at Corvas. Pfizer mayexercise an option by January 1997 for continued development of thiscompound as a treatment of stroke. Exercise of this option wouldresult in a license fee payment of $850,000 and could result in futuremilestone payments. Pfizer would then be responsible for funding allfuture development of NIF as a therapeutic agent.
Corvas has product licensing agreements with Ortho DiagnosticsSystem, ( a Johnson & Johnson company in Raritan, N.J. ) andCentocor Inc., of Malvern, Pa.
With the $7 million received from Schering-Plough, the companyexpects to end the year with approximately $27 million in cash.
Corvas stock (NASDAQ:CVAS) closed Monday at $4.625, up$0.250. n
-- Frances Bishopp
(c) 1997 American Health Consultants. All rights reserved.