Takara Shuzo Co. Ltd. has agreed to pay Houston-based TanoxBiosystems Inc. $13 million to begin development of a treatment forimmunoglobulin A (IgA) nephropathy, which causes deterioration ofthe kidneys.

David Anderson, Tanox's executive vice president, said the dealinvolves an initial license fee plus development and milestonepayments from Takara Shuzo, of Kyoto, Japan. Over the next fourand a half years Tanox could realize a total of $13 million, he added.

The treatment, Anderson said, would involve using monoclonalantibodies to target IgA-expressing B cells in an effort to reduce theamount of IgA-immune complexes. An excess of IgA-immunecomplexes is linked with inflammation of the kidney, or nephritis.The monoclonal antibodies are developed with Tanox's membraneimmunoglobulin isotype-specific technology.

Under terms of the agreement, Takara will have responsibility toconduct clinical trials in Japan and will have rights to market thedrug in Japan and Korea. Tanox would receive royalties on thosesales and will retain all rights to the product in the U.S. andelsewhere in the world.

Tanox, formed in 1986, is a private research and developmentcompany that has raised about $12 million in equity financing.

In addition to the collaboration with Takara, Tanox has a majoragreement to develop monoclonal antibodies for treatment ofallergies and asthma. Anderson said the first product, an antibodytargeting immunoglobulin E, is in Phase I clinical trials. _ CharlesCraig

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