Corange Ltd., the parent company of Boehringer MannheimGmBh, is investing up to $75 million in Protein Design Labs Inc.through a stock purchase.

The investment will give Corange a 15 percent stake in PDL ona fully diluted basis. In addition, the two companies signed aseparate licensing agreement that could net PDL an additional$131 million.

PDL's stock (NASDAQ:PDLI) jumped 29 percent, or $4.88 ashare, on Friday, closing at $21 a share in heavy trading of 1.3million shares; in comparison, 219,000 shares changed handson Thursday.

Corange said that the equity purchase will be done in twostages. Corange initially will invest $30 million in PDL ofMountain View, Calif., with the purchase of 1.2 million newlyissued shares of PDL at $25 per share upon the first closing.This investment will give Corange an 8.1 percent stake in PDLon a fully diluted basis.

In December 1994, Corange will purchase $45 million ofadditional newly issued common stock at $36.50 per share ifthe average closing price of PDL's shares during the first 11months of 1994 is within the range of $20.54 and $26.54,Corange said. The company would then own approximately15.2 percent of PDL in aggregate on a fully diluted basis, basedon the number of PDL securities currently outstanding.

If the average closing price of PDL's shares falls outside of the$20.54-$26.54 range, Corange will pay a 55 percent premiumto the average closing price during this 11-month period (withthe $45 million investment subject to reduction if necessary tosatisfy the limitation that Corange's total ownership of PDL willnot exceed 21 percent on a fully diluted basis), Corange said.

Under the licensing agreement, Corange will acquire exclusivemarketing rights outside North America and Asia to PDL'shuman anti-cytomegalovirus antibody and its SMART anti-L-selectin and SMART anti-CD18 antibodies. It will also acquireexclusive rights to PDL's human anti-hepatitis B antibodyoutside North America.

The anti-CMV antibody and the anti-hepatitis B antibody,which PDL purchased from Sandoz in April, are in clinicals.Four Phase I/II trials with the anti-CMV antibody have beencompleted, and Phase II/III trials in AIDS patients with CMVretinitis are slated for mid-1994. A Phase I trial of the anti-hepatitis B antibody in liver transplant patients also has beencompleted.

The SMART, or humanized, antibodies are in preclinicaldevelopment as potential anti-inflammatory drugs. PDL'sdirector of corporate communications, Peter Dworkin, explainedthat the anti-L-selectin binds to a target on endothelial cellsand the anti-CD8 antibody binds to an antigen on neutrophilcells. He said the two could potentially be used in combinationto block the inflammation cascade.

In return for marketing rights, Corange will pay PDL $10million in signing fees, $30 million in research anddevelopment funding, and milestone payments, which couldbring the total to $131 million, excluding royalties.

In the future, Corange will also obtain North American co-promotion rights and exclusive marketing rights outside NorthAmerica for certain new cardiovascular and other products yetto be developed by PDL. Corange also will obtain exclusiveworldwide marketing rights to certain diagnostic antibodies.

Corange is the second company to take a stake in PDL.Hoffmann-La Roche owns 10.4 percent of the company's shares,which it purchased in 1989 when PDL was a private company.Roche has exclusive worldwide rights to PDL's SMART anti-Tacantibody, which is in clinicals for graft-vs.-host disease, certainleukemias and lymphomas, and organ transplant rejection.

PDL reported a third-quarter loss of $783,000, or 6 cents pershare, compared with a loss of $226,000, or 2 cents per sharein the comparable period a year ago. Revenues for the quarterwere up 31 percent, to $2.85 million. The company reportedcash and short-term investments of $36.5 million as of Sept.30.

Corange is a private company headquartered in Hamilton,Bermuda, with its head office in London. It has three divisions,Boehringer Mannheim-Therapeutics, Boehringer Mannheim-Diagnostics and Depuy-Orthopaedics.

Corange's chief executive officer, Max Link, said the investmentin PDL was precipitated by German company's decline in netprofit, which he attributed to the reform of the public healthsector in Germany. He said the company was also cutting itsstaff of 9,660 in Germany by 1,800.

Corange also emphasized the importance of the U.S.pharmaceutical market, which the company said is now worth$60 billion, representing more than half of the profits in thepharmaceutical industry worldwide. Corange said it expects toannounce another collaboration with a U.S. company beforeChristmas.

The company announced on Oct. 12 that it is movingmanagement of its Boehringer Mannheim-Therapeutics divisionfrom Mannheim, Germany to Greenwich, Conn. The companywill now have two of its divisions in the U.S.; Corange's DepuyOrthopaedics is based in Warsaw, Ind.

Boehringer Mannheim's primary product is erythropoietin(EPO), which it markets in Europe. The company licensed thedrug from Genetics Institute Inc. Amgen Corp. holds patentrights to the drug in the U.S. Boehringer also markets ISMO forangina pectoris in the U.S. and in August received FDA approvalof the diuretic Demadex (torsemide).

-- Brenda Sandburg News Editor

(c) 1997 American Health Consultants. All rights reserved.