Arris Pharmaceutical Corp. entered into a potential $40million, five-year collaboration with Sweden-basedPharmacia AB to develop anticoagulant drugs based onsmall molecule compounds that inhibit serine proteasesinvolved in blood clotting.

John Walker, CEO of South San Francisco-based Arris,said Pharmacia committed to investing $16 million overthree years and a substantial portion of the moneyconstitutes an up-front licensing fee. Additional researchfunding based on milestone payments could push thevalue of the deal to more than $40 million.

The alliance is Arris' second major collaboration withPharmacia, which last month agreed to merge with TheUpjohn Co., of Kalamazoo, Mich., to form a newcompany, Pharmacia & Upjohn Inc., valued at $13billion. (See BioWorld Today, Aug. 22, 1995, p. 1.)

The first Pharmacia deal was forged in April 1993 andtargets cytokine receptor dimerization to mimic the actionof the Swedish pharmaceutical company's growthhormone factors. Another collaboration with Amgen Inc.uses the same technology to develop mimetics of theThousand Oaks, Calif.-based company's erythropoietin(EPO).

In November 1994, Arris signed a potential $70 millionalliance with Germany-based Bayer AG to find otherprotease inhibitors for treatment of inflammatorydiseases.

Walker, commenting on Arris' collaborations, said, "Wewent into 1995 with four years of cash and we'll exit1995 with four years of cash without selling any equity."

In the Pharmacia deal targeting serine protease inhibitors,Walker said Arris already has identified three compoundsthat inhibit thrombin, Factor Xa and Factor VIIa, all ofwhich are involved in the blood clotting cascade.

In addition, he said one compound inhibits both thrombinand Factor Xa, which may prove more effective as ananticoagulant. Clinical trials of a lead compound areexpected to begin in 1997.

One goal of the program, Walker said, is to develop ananticoagulant that can be used as a chronic care treatmentas well as an acute care intervention. The standard currentanti-blood clotting drug is heparin, which accounts formost of the $500 million annual market.

Arris uses what it calls Delta technology, licensed fromthe University of California at San Francisco, to identifyprotease inhibiting compounds.

Arris' stock (NASDAQ:ARRS) closed Tuesday at $13,up 25 cents. Pharmacia (NASDAQ:PHARY) ended theday at $27.31, down 6 cents. n

-- Charles Craig

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