Wyeth-Ayerst Laboratories has agreed to pay Scios Inc. up to $56million as part of an agreement to jointly develop and market Scios'growth factor trafermin, trade-named Fiblast, the two companies saidThursday.

Under terms of the agreement, the firms will share the developmentcosts and profits from sales of the drug in North America. Scios, ofMountain View, Calif., has also granted Wyeth-Ayerst, of Radnor,Pa., exclusive rights to market the drug outside North America and tocountries on the Pacific Rim.

"We are enthusiastic about expanding our relationship with Wyeth-Ayerst given its strength and experience in developing and marketingpharmaceutical products worldwide," said Richard Casey, Scios'chairman and CEO.

Earlier this year, the two companies signed a joint agreement topromote Wyeth-Ayerst's anti-depressant Effexor. Wyeth-Ayerst'sparent company, American Home Products, currently owns 1.6million shares of Scios stock.

The Fiblast deal represents something of a watershed both for Sciosand for trafermin, which initially showed promise as a medicine thatcould speed the healing of stubborn skin ulcers. But the drug failed tolive up to those early expectations, and research into the indicationwas virtually abandoned in the U.S.

Nevertheless, Scios' Japanese partner, Kaken Pharmaceutical Co.,Ltd., of Chiba, applied to have the drug approved for that use in itsown country, said biotech analyst David Stone, managing director ofCowen & Co. in Boston. In 1988, Scios and Kaken signed anagreement that will allow the Japanese company to develop Fiblastfor all indications in Japan, Korea, Hong Kong and China.

Research into the drug _ which consists of a natural human proteincalled basic fibroblast growth factor _ suggests it may indeed haveother promising applications.

The studies have shown that the drug is a potent stimulator of bloodvessel formation and other tissue repair processes. Researchers hopeit will help restore peripheral circulation in diabetics, regeneratedamaged neurons in stroke sufferers and repair cardiac tissue injuredin heart attacks.

All of those indications represent significant, unmet medical needs,doctors say.

Currently, FIBLAST is in Phase I/II clinical trials for stroke andcoronary artery disease. It is in preclinical trials for peripheralvascular disease.

Scios' partnership with Wyeth-Ayerst is likely to generate renewedinterest in the drug throughout the pharmaceutical industry, Stonesaid.

"It certainly is positive for Scios to get what appears to be a betterthan average deal," he told BioWorld Today. "A skeptic might havesaid, `Who besides Scios believes this will ever be a product?' Butthe deal with Wyeth-Ayerst moves it into the pipeline of products thatcan be taken seriously."

Robert Butz, a founder of Quintiles Transnational Corp., of ResearchTriangle Park, N.C., who now is a consultant working ondevelopment of gene therapy technology, said the deal was slightlybetter than average according to an analysis of 100 deals over thepast decade.

According to that study, which was done by Mark Edwards, ofRecombinant Capital Inc. in San Francisco, the average deal totaledabout $40 million. Butz, who has followed both Scios and Wyeth-Ayerst, said the $56 million Fiblast agreement "should not beconsidered a remarkable amount _ just a good solid deal."

The agreement has several major components, according to astatement issued by the two companies.

Wyeth-Ayerst initially will pay Scios $12 million in cash. It also willante up as much as $32 million more when Scios achieves certainmilestones. In addition, Wyeth-Ayerst will set up a $12 million lineof credit that Scios may use to expand its manufacturing facility.

Scios' stock (NASDAQ:SCIO) gained $0.687 on the news Thursdayto close at $6.062. n

-- Steve Sternberg Special To BioWorld Today

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

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