Scios Inc. said it recently ended an eight-year collaboration withPfizer Inc. on development of a diabetes drug, which had progressedto Phase II trials, and negotiated a new deal for the product, calledinsulinotropin, with Novo Nordisk A/S.

In terminating the deal with Pfizer, of New York, Scios regained allrights to insulinotropin, which is a peptide hormone that stimulatesrelease of insulin and helps overcome insulin resistance.

Insulinotropin is targeted for Type II diabetes, which Scios, ofMountain View, Calif., said affects as many as 13 million people inthe U.S.

Novo Nordisk, of Bagsvaerd, Denmark, received an option to licensethe drug. Novo will conduct an analysis of insulinotropin'sdevelopment before deciding whether to pick up the option, whichexpires this fall.

Financial terms of the option agreement were not disclosed.

Anne Bowdidge, spokeswoman for Scios, said the Phase II studies ofinsulinotropin will continue.

Scios and Pfizer began collaborating on the diabetes drug'sdevelopment in 1988. The agreement was restructured in 1994.

Earlier this week, Scios and another collaborator, South SanFrancisco-based Genentech Inc., adjusted their timeline for milestonepayments in the development of Auriculin anaritide, Scios's leaddrug candidate. Auriculin did not achieve its primary endpoints in aPhase III study for acute renal failure. But in an analysis of asubgroup of patients _ those with oliguric acute renal failure _ thedrug did demonstrate statistical significance. Another Phase III trialis under way targeting oliguric acute renal failure patients, who haveabnormally low urine output.

In adjusting terms of their collaboration, Scios and Genentechreaffirmed their support for commercialization and development ofAuriculin. Under the revised agreement Scios will receive fromGenentech a $15 million payment if a new drug application (NDA) isfiled before June 30, 1998, and another $15 million after the drug ison the market.

In the original pact, if Scios submitted the Auriculin NDA before theend of 1997, Genentech was to pay $30 million upon FDA approval.

Scios's stock (NASDAQ:SCIO) closed Friday at $7.32, up 75 cents.n

-- Charles Craig

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