Wyeth-Ayerst has agreed to collaborate with CygnusTherapeutic Systems Inc. on hormone replacement patches tomarket in exchange for exclusive worldwide marketing rights.

Cygnus (NASDAQ:CYGN) announced late Tuesday that Wyeth-Ayerst, a division of American Home Products, will pay for allclinical trial expenses and provide Cygnus with up-front andmilestone payments, as well as a percentage of net sales on allproducts worldwide. Cygnus will develop and manufacture theproducts.

The agreement specifically covers five products: an estrogenpatch, three estrogen/progestin combination patches, and afifth product that will not necessarily be in the hormonereplacement market. Cygnus' vice president of corporatecommunications, Craig Carlson, said the latter product likelywill apply Cygnus' transdermal technology to a Wyeth-Ayerstdrug.

Carlson noted that Cygnus plans to file an investigational newdrug (IND) application for the estrogen patch and one of thecombination patches by the end of December. The other twopatches are further behind in preclinical testing.

Cygnus' transdermal technology allows patients to wear a patchfor seven days. Carlson said other companies have patches thatlast for three-and-a-half days. One of the five products beingdeveloped in collaboration with Wyeth-Ayerst is a three-and-a-half day patch. Carlson said the progestin used in this patchhas a low potency, so it would take a very large patch tocontain enough drug for seven days.

Cygnus of Redwood City, Calif., has one product on the market,a Nicotrol nicotine transdermal patch that was approved inApril 1992. Wyeth-Ayerst markets Premarin, the leadingestrogen replacement therapy. Carlson said Wyeth-Ayerst hasmore than a 70 percent share of the hormone replacementmarket.

Cygnus also has an agreement with Warner-Lambert todevelop a different type of estrogen patch. In addition, Sanofihas licensed from Cygnus an estrogen patch in developmentand sublicensed it to Warner-Lambert. Carlson said that patchis a different size than the one that will be developed withWyeth-Ayerst.

In October, Cygnus signed an agreement with Procter & Gambleto apply its drug-delivery technology for an unspecifiedproduct sold directly to the consumer (as opposed to aprescription drug).

Cygnus' stock was up 13 cents a share on Tuesday, closing at$9.88.

-- Brenda Sandburg News Editor

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