Argus Pharmaceuticals Inc. and Genzyme Corp. have joinedforces in an effort to bring to the market Argus' anti-cancerdrug Tretinoin(LF), a lipid-based intravenous formulation oftretinoin which is currently in Phase I clinical trials for treatingleukemia.

Cambridge, Mass.-based Genzyme has agreed to invest about$20 million in the collaboration. Of that, $10 million will gotowards the purchase of newly issued shares of Argus stock(NASDAQ:ARGS), giving Genzyme about 9 percent equity in theHouston-based firm. Moreover, Genzyme (NASDAQ:GENZ) willcontribute $1.5 million in milestone payments. The twocompanies will share the responsibility for taking Tretinointhrough the clinic, as well as providing the funds necessary toachieve that--about $10 million. Kenneth Cohen, Argus' vicepresident of business affairs, told BioWorld that "a substantialportion of that $10 million will come to Argus in the form ofreimbursement of expenses or as direct funds."

Genzyme will receive worldwide marketing rights and anoption on manufacturing the product, while Argus will receiveroyalties and retain an option for co-marketing Tretinoin(LF) inthe U.S.

Tretinoin (a derivative of vitamin A) is a retinoid; as such, it isa member of the newly identified class of anticancer drugs thatact by triggering cells to differentiate. It's known that manycancerous cells--including leukemias--retain undifferentiatedimmature states in which they multiply uncontrollably.Apparently the retinoids can cause those cells to stopmultiplying and start differentiating into mature cells withspecific functions.

Argus has an ongoing research and development program forTretinoin, which it has formulated in a lipid carrier to changethe drug's basic pharmacokinetics and distribution for moreeffective delivery vis a vis the free drug. The companyreceived orphan drug designation for the product in Januaryand initiated Phase I clinical trials of Tretinoin(LF) for treatingleukemia in late March. They are being conducted at theUniversity of Texas M.D. Anderson Cancer Center in Houston.

For Argus, the agreement with Genzyme "brings immediate andlong-term support for one of our major cancer programs, whileproviding access to Genzyme's global development,manufacturing and marketing strengths," commented DavidLeech, Argus' president and chief executive officer. "Argus willcontinue to fund and drive the program in the U.S., whileGenzyme's efforts will be directed more towards expandingproduct development outside the U.S.," explained Argus' Cohen.

And Genzyme is investing in a product that is already inhuman testing, an improved formulation of a drug withestablished efficacy and that "presents a very substantialmarket opportunity in certain well-defined niche marketsegments," explained Geoffrey Cox, senior vice president ofGenzyme.

Importantly, Genzyme's investment in Argus also extends itsown phospholipid business, which it acquired from its spinoffcompany Neozyme Corp. (Neozyme I) in July of 1992. Genzymehas been developing synthetic phospholipids as components ofpharmaceuticals and drug-delivery systems--including Argus'Tretanoin formulation. And now, "Genzyme will become asignificant phospholipid supplier to Argus," Cohen toldBioWorld.

-- Jennifer Van Brunt Senior Editor

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