Japan Tobacco Inc. (JT) may invest up to $28 million inAgouron Pharmaceuticals Inc. in an expanded research anddevelopment alliance, the companies announced Monday. Thenew alliance, which will cover development of anti-viral drugs,could bring the total value of the Japanese company'sinvestment in Agouron of La Jolla, Calif., to $56 million.
The two companies will collaborate to develop compounds thatinactivate protease enzymes, which are implicated in thereplication of hepatitis C, herpes viruses and the rhinovirusesresponsible for common upper-respiratory infections, Agouronsaid. The design strategy for the three therapeutic targets willbe modeled on one used by Agouron in the design of its anti-HIV compounds, such as AG-1343 and AG-1350, which arecurrently in preclinical development. Agouron said its two anti-HIV compounds have been able to halt HIV infection of T-lymphocytes in vitro.
Payments to Agouron from the collaboration with JT (whichdoes not encompass development of HIV protease inhibitors)will be based on preclinical research milestones rather thanhuman clinical or regulatory milestones. JT did not acquireequity in Agouron as part of the agreement.
In its last collaboration with JT, announced in December 1992,Agouron sold $3 million in shares of its common stock, givingthe Japanese conglomerate approximately 2 percent stake inthe company. That agreement focused on the development oftherapeutic immunosuppressives for a broad range of illnesses.The companies are currently in the drug-design phase of thatproject, Agouron's director of corporate communications, DonnaNichols, told BioWorld.
Under the terms of the expanded agreement, Agouron willretain rights to market anti-hepatitis C and anti-herpes drugsin the U.S., Canada and Mexico, while JT will have marketingrights in Japan, Taiwan and South Korea. The companies willshare rights in other parts of the world and have jointresponsibility for the development and commercialization ofthe anti-virals.
Agouron (NASDAQ:AGPH) maintains exclusive, royalty-freerights to develop, manufacture and market drugs for thetreatment or prevention of pathogenic rhinoviruses, while JThas the first rights to negotiate a license to develop,manufacture and market those drugs in Japan and elsewhere inAsia.
Thus far in its collaboration with Agouron, JT has madeinvestments of $9.8 million and committed to at least $21million in payments over the three-to-four-year researchagreement. JT will invest at least $36 million in Agouron underthe expanded collaboration. JT is also making a $7 million up-front payment and will pay Agouron at least $8 million moreover the next two years.
The alliance follows news that Merck's HIV protease inhibitor,L-735,524, which works on the same principle as Agouron'sAG-1343 and AG-1350 HIV protease inhibitors, did notdemonstrate the efficacy first attributed to it in early Phase Itesting. Merck found that while virus levels (measured by viralRNA) dropped significantly in patients during the first sixmonths in which they were treated with the drug, HIV levelslater rebounded to pre-treatment levels. Merck, which hasenrolled 60 patients for a Phase II study, has decided againstfurther expansion of the trial, a company representative said.
Nichols distinguished Agouron's HIV compounds from Merck'sprotease inhibitor, saying that Agouron's are about 10 timesmore potent and have been able to achieve higher plasmalevels than L-735,524, although unlike Merck's agent, neitherAG-1343 nor AG-1350 has been tested in humans. Nicholsstressed that Agouron's collaboration with Japan Tobacco onprotease inhibiting agents is distinct from its own HIV proteaseinhibitor program. In developing agents to fight other viralinfections, such as herpes and hepatitis C, she said, "what we'velearned in HIV protease can be conveyed to the otherproteases."
Agouron's stock climbed $1.88 a share to close at $11.50 onMonday.
-- Karl A. Thiel Business Editor
(c) 1997 American Health Consultants. All rights reserved.