Anergen Inc., a small California biotechnology company that isdeveloping therapies for treating autoimmune diseases, has caughtthe eye of Danish insulin producer Novo Nordisk A/S, which intendsto invest upward of $25 million, including $8 million in equity, fornew products to treat diabetes and other diseases.

The two companies announced Monday that they have agreed topursue the research and development of therapeutic products fortreating type I diabetes, multiple sclerosis (MS) and myastheniagravis (MG).

Novo Nordisk (NYSE:NVO) has agreed to fund R&D programs in theseareas, and Anergen of Redwood City, Calif., will receive milestonepayments. Both companies will contribute to manufacturingprocesses and Anergen will receive royalties from Novo Nordiskbased on product sales. Novo Nordisk has the rights to worldwidesales of products for treating all three disease indications, whileAnergen retains the rights to co-promote products for MS and MG inNorth America.

Anergen also will work closely with Novo Nordisk's U.S.-basedsubsidiary, ZymoGenetics, on product research and development.Novo Nordisk's purchase of 1.22 million shares of Anergen commonstock (NASDAQ:ANRG) for $8 million gives it a 17.5 percent equitystake in the company. Anergen's stock closed at $6.50 a share onMonday, up 25 cents.

Combined with the R&D agreement, Anergen said it could receive upto $25 million in addition to future royalties if all milestones are met.The formal agreement is for three years, with options to extend it,said John Fara, Anergen's president and chief executive officer.

This agreement gives Anergen about 7 million shares outstandingand close to $12 million in the bank, Fara said.

Not only does the agreement give Anergen a financial boost, it alsoallows the company to get involved in diabetes product development,something it would not have been able to do without Novo-Nordisk'sinterest, Fara told BioWorld.

Novo-Nordisk is a major supplier worldwide of insulin, includingrecombinant human insulin, and it has tremendous manufacturingexpertise, Fara explained. And the agreements with Anergen giveNovo-Nordisk of Copenhagen an opportunity to "... improve ourunderstanding of the etiology of diabetes and of other autoimmunediseases, and give us new leads on how to treat these diseases forwhich there is currently no cure," according to Erik Sorensen,president of Novo Nordisk's health-care group.

Anergen's product development strategy involves creatingbiomolecules that inactivate (anergize) disease-related T cells --specifically only the subset of T cells related to a particular disease.This involves isolating the antigenic epitope, the portion of theculprit disease-causing protein or peptide that is recognized by the Tcell.

The company then couples the epitope to components of the majorhistocompatibility complex (MHC) to form a complex (AnergiX) thatbinds the T cell receptor in such a way that the cells can no longerrespond to stimulation with more antigen, i.e., anergy.

Anergen researchers have tested this system in various in vitro andanimal models of myasthenia gravis, rheumatoid arthritis andmultiple sclerosis. For example, the scientists have tested an AnergiXcompound in cells removed from MS patients to "determine whetherwe're working with the correct peptide," Fara told BioWorld. "The useof our materials creates both anergy and apoptosis (in in vitro tests)."

He added that these sorts of assays, which the company has alsoperformed in cells isolated from patients with MG, allow Anergen todefine the range of doses with which to begin clinical trials.

Fara said Anergen intends to file investigational new drug (IND)applications for clinical trials in both diseases later this year or inearly 1994.

-- Jennifer Van Brunt Senior Editor

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