Repligen Inc. has suffered another disappointment as EliLilly and Co. discontinued a three-year-old collaborationaimed at developing antibody-based drugs forinflammatory diseases.

The move by Lilly, of Indianapolis, came three monthsafter it agreed to extend the 1992 alliance through 1996after which it intended to take over the developmentprogram.

Cambridge, Mass.-based Repligen has been strugglingwith dwindling cash resources. In July a proposed mergerwith Medco Research Inc., of Research Triangle Park,N.C., failed when Medco backed out of the deal. Andearlier this year, the company was forced to lay off halfits staff and cut back on product development.

The collaboration with Lilly focused on creatingmonoclonal antibodies targeting the CD11b receptor onneutrophils, a type of white blood cells that are part of theinflammatory cascade and that cause tissue damage.

Avery Catlin, Repligen's chief financial officer, said theclinical trial will continue. The full developmentprogram, which includes preclinical studies of a secondantibody, will be funded through the next quarter whileRepligen looks for another corporate partner.

"There's a great opportunity here," Catlin said. "Theprogram comes back to us, no strings attached, after Lillyhas invested $30 million."

Catlin said the amount of research funding lost in theLilly withdrawal is not significant because Repligen wasin the process of transferring the project to thepharmaceutical company.

Two months ago, Repligen, with a burn rate of up to $1million a month, said it had enough funds to keepoperating for a year.

Since February 1995 when Repligen restructured, it hasfocused its resources on developing recombinant plateletfactor 4 for cancer and cardiovascular treatments.

Repligen's stock (NASDAQ:RGEN) closed Wednesdaydown 6 cents to $1.50. _ Charles Craig

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