Gliatech Inc. and a Johnson & Johnson subsidiary entered into aagreement Friday to collaborate on the discovery and developmentof compounds to treat Alzheimer's disease.Gliatech, of Cleveland, received an initial licensing fee and anequity investment of less than 5 percent from JanssenPharmaceutica N.V. of Beerse, Belgium, which is wholly owned byJohnson & Johnson. Janssen will provide research funding for atleast three years and make milestone payments.In return, Janssen gets exclusive worldwide marketing rights tocompounds coming out of the collaboration, which may also targetother neurodegenerative disease. Janssen will be responsible forclinical trials. Gliatech will get a royalty on sales. Financial termswere not disclosed."It's been a long time coming," Thomas Oesterling, Gliatech'spresident and CEO, said of the agreement. "We've been on thisproject since 1991. We've been hoping we could interest a partnerin helping us move this forward, and we've found what we believeis the ideal partner."Gliatech's Alzheimer's research has be focused on reducing build-up of beta-amyloid peptide to prevent formation of senile plaques inthe brain. Dense formations of senile plaques are believed to beassociated with dying neurons and reduced cognitive capabilities.Oesterling told BioWorld that efforts by other researchers are basedon preventing formation of beta-amyloid. "Our focus is on theremoval of beta-amyloid. We believe glial cells are called upon toremove beta-amyloid protein."When glial cells are compromised it makes the situation worse."This leads to the irreversible process which results in loss ofneurons and continued subsequent dementia," Oesterling said."We believe we know how the glial cells are compromised," hesaid, and have assays and compounds that prevent thecompromising. "Therefore these could be looked upon as potentialdrug candidates."The development effort will be two-fold. Gliatech brings assays andscreens to test against compounds synthesized over the years byJanssen to look for additional compounds. And rational drug designwill be used.Over the three-year deal, which can be expanded, Gliatech hopes tohave leads identified, animal toxicity studies done and prepare forhuman trials, Oesterling said.Janssen entered into a collaboration with Chiron Corp., ofEmeryville, Calif., last month on the development of newcombinatorial libraries that will be screened to identify new classesof lead compounds.Privately held Gliatech has a product, Adcon-L, which it ispreparing to launch in Europe by the end of the year. That product,designated as a device, is a gel designed to prevent surgicaladhesion formation after surgery on the lower back. Adcon-T/N isbeing developed to prevent unwanted scar tissue following tendonand nerve surgeries. Oesterling said a U.S. pivotal trial for the latterproduct is scheduled to start early in 1995.He said Gliatech had about $5 million in cash at the end of June,and was burning about $4 million to $5 million per year. Thecompany has about 23 million shares outstanding. n

-- Jim Shrine

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