Agouron Pharmaceuticals Inc. said Thursday that it expanded itsalliance with Japan Tobacco Inc. to include Agouron's HIV proteaseinhibitor. The deal could net Agouron $30 million by the end ofMarch 1995.

Tokyo-based Japan Tobacco made an initial $2.5 million payment toAgouron. Another $3.5 million will be paid upon "satisfactoryresults" from a Phase I trial of the drug, AG1343, which is expectedto be completed by the end of the month. And Agouron would get$24 million more assuming satisfactory results come out of a small,pilot Phase II study expected to be completed by the end of March.

Peter Johnson, president and CEO of La Jolla, Calif.-based Agouron,told BioWorld exact criteria needed for payoff of the milestones isnot being revealed. But he said the milestones in the Phase I studyinvolve seeing the same kind of pharmacology and bioavailabilitythat was seen in animal models. "We feel very confident of beingsuccessful," he said.

In the pilot Phase II trial, "we'll be looking at a small number of HIVpositive patients," Johnson said. "We'll be looking at a treatmentperiod of not more than 30 days, monitoring the familiar surrogatemarkers _ viral load, CD4 counts _ to confirm it produces antiviraleffects in humans."

Agouron already has received more than $25 million from JapanTobacco, with which it has a separate collaboration involvingcompounds that inactivate protease enzymes, which are implicated inthe replication of hepatitis C, herpes viruses and the rhinovirusesresponsible for upper-respiratory infections. That collaboration, stillin the discovery phase, could be worth $56 million to Agouron. (SeeBioWorld Today, March 1, 1994, p. 1.)

Johnson said Agouron was fortunate to be able to talk to a number ofpotential collaborators about AG1343. But the initial money fromJapan Tobacco, the companies' ongoing relationship, and thedevelopment terms offered led Agouron to choose the Japanesecompany.

Agouron and Japan Tobacco will share development costs ofAG1343 after the pilot Phase II study. But Agouron won't have topay more than $15 million, or half of what it would get at that point,as its share of the co-development costs. Japan Tobacco would getback its extra development costs after drug approval.

Agouron has exclusive rights to AG1343 in the U.S., Canada andMexico. Japan Tobacco has rights in Asia. In Europe and the rest ofthe world, the rights will be held by a joint venture of the companies.

Agouron discovered the compound along with Eli Lilly & Co., ofIndianapolis, during an earlier collaboration on HIV proteaseinhibitors. Agouron received worldwide commercial rights to anumber of protease inhibitors, including AG1343, in exchange forproprietary details of three three-dimensional atomic structure ofrhinovirus 3C protease.

"There's such clear evidence now that by inhibiting proteases of thiskind, you have a viable strategy for antiviral drugs," Johnson said."Japan Tobacco was first interested in applying that strategy in theseother families of viruses, and now has decided to be partners with usin the HIV protease inhibitor."

The only equity Japan Tobacco acquired in Agouron came from aDecember 1992 agreement in which the Japanese conglomeratebought a 2 percent stake for $3 million. That deal focused ondevelopment of immunosuppressives.

As of Sept. 30, Agouron (NASDAQ:AGPH) reported nearly $30million in cash and equivalents, and 7.3 million shares outstanding.Its stock rose 10 percent, or $1.19 per share, Thursday, closing at$12.75. n

-- Jim Shrine

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