Celltech Group plc said Thursday that it intends to enter into acollaborative agreement with Merck & Co. Inc. worth L31.5 million,(U.S. $48.8 million) to develop and market drug compounds for thetreatment of asthma."As far as we know, the deal with Merck is the largest deal any U.K.biotechnology company has done," Peter Fellner, Celltech's CEO, toldBioWorld. "I think the second largest deal is the one we did withBayer AG [more than $40 million]. Even by U.S. standards, this is abig one." (See the story below for more information on U.K.-U.S.biotech industry collaborative efforts.)The lead compound involved in the new collaboration is CDP 840, ananti-inflammatory that acts by inhibiting the enzymephosphodiesterase. Preclinical studies showed that the compound wasa potent anti-inflammatory and also prevented induced airwayhyperactivity, a key feature of asthma. CDP 840 already has completedPhase I studies, with Phase II expected to begin in September."It will combine in one molecule extremely effective anti-inflammatory action and also block or reduce the acts ofbronchoconstriction," Fellner said.Celltech will receive a "significant" up-front payment, which will berevealed when the deal is signed, probably in September, annualresearch payments for the first few years, and the remainder of the$48.8 million will be tied to certain research and developmentmilestones over about five years, Fellner said. Celltech will continue todevelop the compound through initial Phase II studies, then turn itover to Merck for later Phase II and III studies. Celltech will getroyalties on worldwide sales."Most of the other compounds people have taken into early clinicalstudies have interesting profiles but cause nausea and vomiting,"Fellner said. "We believe we've avoided that because we designed acompound which binds extremely specifically to the cloned targetenzyme."Fellner said the collaboration also will work on developing backup orsecond-generation compounds for the same indications: asthma andchronic obstructive pulmonary diseases, such as chronic bronchitis.Fellner said a valuable part of the agreement to Celltech is that it getsback rights to metalloprotease inhibitors for which it has been incollaboration since 1989 with Merck, of Whitehouse Station, N.J.Each company will pursue individual indications for the compounds,with Celltech targeting the oncology area and Merck going afterarthritis.Edward Scolnick, Merck's executive vice president, science andtechnology, and president of Merck Research Laboratories, said,"Merck has chosen to work with Celltech because we recognize that itsscientists have developed a world-leading position inphosphodiesterase IV inhibition, and we are excited at the prospect ofcollaborating with them on this novel approach to asthma."Celltech's collaboration with Bayer, already worth $15 million toCelltech and potentially worth more than $40 million, involvehumanized antibodies that block tumor necrosis factor. One product,CDP 571, has completed a Phase II study in rheumatoid arthritis,which will be reported on this fall. A Phase II for inflammatory boweldisease is expected to be completed in mid-1995, a Phase II in Type IIdiabetes is expected to be completed late this year, and a Phase II studyin septic shock is completed, Fellner said.Celltech also is in a collaboration with American Cyanamid thatinvolves antibodies armed with cytotoxic drugs to target cancer cells.One antibody is close to finishing a Phase I trial in ovarian cancer,another antibody is expected to go into Phase I/II trials in acutemyeloid leukemia later this year, and an antibody is expected to enter aPhase I trial for colorectal cancer in September, Fellner said.Another collaboration, involving inflammation, is with Schering-Plough to develop and commercialize genetically engineeredantibodies to selected cytokines. A molecule is expected in the clinicnext year, Fellner said. n

-- Jim Shrine

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