Houston Biotechnology Inc. said $250,000 it received foran option to market its ophthalmic drug candidate inJapan from Santen Pharmaceuticals Co. Ltd. will keep theTexas company operating until March 1996.

Houston Biotechnology's lead compound, 4197X-RAimmunotoxin, is in Phase I/II trials for preventingsecondary cataracts in patients who undergo cataractsurgery.

Santen has until Dec. 21, 1995, to exercise the option. Ifthe Osaka-based pharmaceutical firm enters the co-development and licensing agreement it will pay HoustonBiotechnology up to $7.75 million over the next sixyears.

The collaboration would be Houston Biotechnology'ssecond agreement with Santen for development of4197X-RA immunotoxin. Santen already has paid $2million in the alliance, but the partnership wasdiscontinued after Houston Biotechnology, of TheWoodlands, Texas, missed certain milestones.

Donald Clark, Houston Biotechnology's vice president ofdevelopment and medical affairs, said his company willhave to secure additional corporate partnerships tocomplete clinical development in the U.S. and Europe.

Earlier this year, the company cut its work force by 30percent to focus its resources on development of 4197X-RA immunotoxin.

The drug is designed to reduce residual lens epithelialcells following primary cataract surgery. The residualcells contribute to secondary cataracts in up to 50 percentof patients who have the primary surgery.

Houston Biotechnology said recent interim data from thePhase I/II trials showed the drug achieved statisticalsignificance in preventing lens capsule opacificationwhen compared with a placebo. Results from additionalfollow-up of the patients will be released in 1996.

With the $250,000 Santen option, HoustonBiotechnology said its cash position was boosted to$650,000, enough to fund operations until March 1996.For the first nine months of 1995, the company reported anet loss of $2.1 million, or 38 cents per share. For thesame period in 1994, Houston Biotechnology lost $3.3million, or 68 cents per share. The company has about 5.6million shares outstanding.

Houston Biotechnology's stock (AMEX:HBI) closedTuesday at 62 cents, down 19 cents. n

-- Charles Craig

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