Cephalon Inc. and Schering-Plough Corp. on Thursdayrenewed their Alzheimer's disease collaboration in anextension that could be worth $32 million for Cephalon.

The companies have been collaborating since May 1990on development of protease inhibitors that prevent thesecretion of beta-amyloid peptide, a component ofplaques that cause neuronal death. Schering-Plough hascontributed $20 million in research funding over the firstfive years of the arrangement.

Cephalon, of West Chester, Pa., with the new five-yeardeal gained an option to co-promote resulting products inthe U.S. while getting royalties on sales outside the U.S.The $32 million that Cephalon could realize in therenewed five-year collaboration breaks down into $16.5million in research payments and $15.5 million in clinicaldevelopment milestones, said Jason Rubin, thecompany's vice president, corporate communications.

"We've been working with a specific type of protease thatin preclinical studies mediates the generation andsecretion of beta-amyloid peptide," Rubin said. "We'vebeen working with Schering-Plough in developingspecific inhibitors of these proteases.

"We have not selected specific drug candidates as yet,"he said. "We would hope to have a drug candidate inclinical development well before the conclusion of thisfive-year agreement."

The original collaboration encompassed two ofCephalon's research programs on Alzheimer's disease.The other one focused on development of small organicmolecules to enhance the endogenous production ofnaturally occurring growth factors in the brain,particularly nerve growth factors. Cephalon calls that itsneurotrophic enhancing molecules (NEM) program.

Schering-Plough, of Madison, N.J., decided todiscontinue its involvement in the NEM area, butCephalon still is working on that program.

"At this point we're continuing to pursue several classesof NEMs that have the ability to cross the blood-brainbarrier, enhance the expression of nerve growth factorsand promote survival of the neurons in regions of thebrain known to be affected by Alzheimer's disease,"Rubin said.

Cephalon is working toward early 1996 milestones in twoother collaborations.

The company and partner Chiron Corp., of Emeryville,Calif., expect to file a new drug application early nextyear for Myotrophin (insulin-like growth factor) for thetreatment of amyotrophic lateral sclerosis.

Cephalon and TAP Pharmaceuticals Inc. are completingtoxicology studies of CEP-571 and working toward anearly 1996 investigational new drug application to studythe agent in prostate cancer. The compound comes frominhibitors of Cephalon's receptor tyrosine kinase family.TAP, of Deerfield Ill., is a joint venture between AbbottLaboratories, of Abbott Park, Ill., and Takeda ChemicalIndustries Ltd., of Osaka, Japan.

Another Cephalon collaboration is with SmithKlineBeecham, of London. They are developing calpaininhibitors for stroke.

Cephalon's stock (NASDAQ:CEPH) gained 38 centsThursday to close at $27.75. n

-- Jim Shrine

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