Regeneron Pharmaceuticals Inc. received a $10 million equityinvestment from Medtronic Inc. Friday as an up-front payment for acollaboration aimed initially at developing a drug that prevents thetype of nerve cell degeneration that is characteristic of Huntington'sdisease.
Under the alliance, Regeneron, of Tarrytown, N.Y., will explore thepossibility of using Medtronic's implantable pump to deliver thedrug, described as a second-generation neurotrophic factor, directlyinto the brain.
Regeneron's proposed Huntington's disease treatment, calledAxokine, is in preclinical studies for treatment of the disorder.
Murray Goldberg, Regeneron's chief financial officer, said Axokineis a genetically modified form of ciliary neurotrophic factor (CNTF).He added the drug is designed as an improved version of CNTF,which is a protein believed to help nerve cells survive.
Medtronic's SynchroMed pump is on the market for deliveringchemotherapy agents and is being tested for use with other drugcandidates, such as Menlo Park, Calif.-based Neurex Corp.'s SNX-111, a neuron specific calcium channel blocker directed to the spineto treat intractable pain.
In the deal with Regeneron, Medtronic, of Minneapolis, purchased460,500 shares of Regeneron stock at $21.72 per share, which isnearly a 40 percent premium to the $15.63 the stock was trading atThursday, the day before the collaboration was announced.
Regeneron (NASDAQ:REGN) closed Friday $1.75 higher to $17.37.Medtronic (NYSE:MDT) ended the day at $55.87, up 25 cents.
With its equity investment, Medtronic received five-year warrants topurchase another 107,400 Regeneron shares at the same price, $21.72per share.
Medtronic, which also agreed to make milestone payments toRegeneron and contribute royalties, bought worldwide exclusiverights to jointly develop Axokine and related drugs for centralnervous system disorders.
The Medtronic investment in Regeneron follows by two months a$48 million equity investment by Amgen Inc., of Thousand Oaks,Calif., which is working with Regeneron on clinical development oftwo other neurotrophic factors _ brain-derived neurotrophic factor(BDNF) and neurotrophin-3 (NT-3).
Amgen, which bought 3 million shares at $16 per share, boosted itsstake in Regeneron to 18 percent.
As of March 31, 1996, Regeneron had $47.5 million in cash andreported a net loss of $7.8 million for the first three months of thisyear.
Medtronic's SynchroMed pump is programmable to graduallydispense a drug to a specific area of the body. The battery-operateddevice, about three inches in diameter, is implanted in the abdomenwith a catheter running to the delivery site. It can hold as much as athree month supply of some drugs and can be refilled withoutremoval. Its batteries are operational for up to five years.
Regeneron officials said Axokine's potential as a treatment forHuntington's disease was discovered in studies of an animal model ofthe disorder. In rats, quinolinic acid is injected into their brains tocause a similar type of nerve cell degeneration as that experienced bypeople with Huntington's disease.
The company's researchers said when they treated the rat brains withAxokine, it protected the cells from the damage caused by thequinolinic acid.
Huntington's disease is a genetic disorder that results in deteriorationof nerve cells responsible for voluntary movement and otherbehavior. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.