Denver-based Cortech Inc. signed a $9.45 million agreement withOno Pharmaceutical Co. Ltd. to develop oral compounds aimed atinhibiting the protein-degrading enzyme, elastase, for treatment ofinflammatory diseases such as rheumatoid arthritis.

Timothy Rodell, Cortech's executive vice president, said thecollaboration with Osaka-based Ono involves creation of a new classof drugs that are chemically unrelated to the injectable elastaseinhibitors under development since 1987 in Cortech's partnershipwith Marion Merrell Dow, of Kansas City.

Under terms of the three-year deal with Ono, Cortech will receive$3.25 million up front and about $3.1 million in each succeedingyear. Ono will pay another $1 million when a compound enterspreclinical testing, making the entire research collaboration worth apotential $10.45 million to Cortech.

Ono, in return, gets exclusive, royalty-free rights to make and sell thecompounds in Japan, Korea, Taiwan and China. Cortech retainsrights to market the drugs elsewhere in the world.

Rodell said Cortech expects to select a compound for preclinicaldevelopment within the three-year life of the agreement with Ono. Inaddition to rheumatoid arthritis, possible disease targets includechronic obstructive pulmonary disease and inflammatory boweldisease.

Elastase is released by neutrophils to clear inflammatory debris,Cortech officials explained, but in severe cases of inflammation, anexcess of elastase can damage connective tissues.

In the collaboration with Marion Merrell Dow, Rodell said onecompound, CE-1037, is in Phase I trials for acute respiratory distresssyndrome and data from the studies are expected this year. MarionMerrell Dow has worldwide rights to compounds developed with theelastase inhibiting technology used to create CE-1037.

Rodell said during the initial research efforts with Marion MerrellDow, Cortech discovered additional methods for developing elastaseinhibitors and in 1993 Marion Merrell Dow returned to Cortech allrights to technology outside the patent for CE-1037.

Cortech (NASDAQ:CRTQ) closed Monday at $2.44, down 6 cents. n

-- Charles Craig

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