Cell Therapeutics Inc. will collaborate with Johnson & Johnsonsubsidiaries, R.W. Johnson Pharmaceuticals Research Institute andOrtho Biotech Inc, of Raritan, N.J., on the development andcommercialization of lisofylline, Cell Therapeutics' leadingcompound designed to reduce toxicities in patients undergoingradiation and chemotherapy.

Lee Parker, vice president of investor relations with CellTherapeutics, told BioWorld Today that his company has received anup-front payment of $5 million as well as $5 million in connectionwith the sale of a new series of Cell Therapeutics' convertiblepreferred stock.

Ortho and its affiliates, Parker said, have agreed to make additionalequity and milestone payments as Cell Therapeutics achieves certaindevelopment and regulatory events.

R.W. Johnson will fund 60 percent of future development costs in theU.S. and Cell Therapeutics will fund the other 40 percent until FDAapproval is achieved. At that point, the companies will switch to acommercialization, co-development pact in which the two parties willshare equally in profits and losses.

Ortho and affiliates will commercialize the compound in the rest ofthe world, excluding Canada, and will pay royalties on sales, theterms of which were not disclosed. BioChem Pharma Inc., of Canada,holds the Canadian rights.

"Johnson & Johnson is one of the world's largest health careorganizations, so this is a very important deal for us," Parker said."Johnson & Johnson will give us support in the U.S. market, andundertake 100 percent of the commercialization and developmentoverseas and pay us royalties."

Lisofylline is an anti-inflammatory compound that modulatesselective stress-activated signaling pathways caused by radiation andcytotoxic chemotherapy. It is currently in Phase III trials to examinethe compound's ability to reduce side effects in cancer patients whoare undergoing high-dose radiation and/or chemotherapy, to befollowed by bone marrow or stem cell support.

Phase II trials are also being conducted to determine effectiveness inreducing the incidence of serious infections and treatment-relatedmortality among patients receiving high-dose chemotherapy and orradiation. These trials focus on myelogenous leukemia patients, whoare receiving chemotherapy and/or radiation therapy, but not bonemarrow transplants.

The Phase III trials, Parker said, use patients with advancedhematological malignancies of all varieties. These patients havestopped responding to chemotherapy or never responded at all andare going into high-dose chemo, radiation or both, followed by abone marrow transplant.

The drug is administered after chemo and or radiation treatments arefinished, with the goals of reducing serious or fatal neutropenia-related infections up to day 35 and treatment-related mortality up today 100, Parker explained. The Phase II trial has similar end points:reduced infection short-term and reduced mortality long-term.

"One of the major side effects of chemo or radiation," Parker said, "ismucositis. What we think is happening is this disruption of cellsallows bacteria and fungal spores to leak into the body, causinginfection."

Seattle-based Cell Therapeutics believes that lisofylline willaccelerate stem cell recovery in bone marrow and in thegastrointestinal tract, leading to rapid recovery of red and whiteblood cells and platelets.

"This is a very significant development for us," Parker said, "itspeaks volumes, at least from our point of view, about ourtechnology, that Johnson & Johnson and its extensive due diligenceon this matter, is convinced that this compound has potential. Theyare convinced enough, to commit up to $5 million up front andsignificant more millions as time goes on."

With this new cash infusion privately held Cell Therapeutics,founded in 1992, will have $34 million in the bank. The company'sburn rate is $18 million a year.

Johnson & Johnson, of New Brunswick, N.J., has $18.8 million insales and assets of $17.873 billion. n

-- Frances Bishopp

(c) 1997 American Health Consultants. All rights reserved.