In a unique three-way agreement announced Thursday,research-based Oncogene Science Inc. (OSI) is teaming up withpharmaceutical players Ciba-Geigy Ltd. and Pfizer Inc. todevelop and commercialize the protein transforming growthfactor-beta 3 (TGF beta 3) as a therapeutic drug for treating thetoxic side effects of cancer chemotherapy and as a wound-healing agent.

Under the terms of the agreement, OSI of Uniondale, N.Y., andPfizer (NYSE:PFE) will develop TGF beta 3 as a chemoprotectant,specifically to prevent oral mucositis, a painful, debilitatingcondition common among chemotherapy patients.

Ciba-Geigy of Basel, Switzerland, which already has preclinicalresults indicating that TGF beta 3 can accelerate wound healingin older animals, has worldwide rights to develop andcommercialize the product for this purpose. The company willuse the manufacturing process it has developed, which employsbacteria as a production system, to cost-effectively produceenough commercial quantities of TGF beta 3 to satisfy theneeds of all parties involved in the agreements.

"This is purely a rights deal," explained Robert Van Nostrand,OSI's vice president of finance and administration. "No moneyis changing hands at this point and there are no equities." Oncethe royalty streams start flowing, he added, "OSI will receiveroyalties from both partners, and Ciba will pay royalties toPfizer as well."

In many ways this agreement is the climax of OSI's(NASDAQ:ONCS) research and development work on TGF beta 3,a protein it not only discovered, but one that has been a focusof the company's business almost since OSI's inception in 1983,Van Nostrand told BioWorld.

In fact, TGF beta 3 is currently the only protein that OSI isworking on. "Most of the work at OSI is on non-biological drugsthat affect gene transcription," Van Nostrand said.

Pfizer joined the research effort on TGF beta 3 in 1986, when itinitiated its long-standing agreement with OSI on anti-canceragents, including TGF beta 3. Pfizer, whose central researchfacility is based in Groton, Conn., expects to be in clinical trialswith TGF beta 3 for treating oral mucositis by the first quarterof 1994. Ciba-Geigy said it will initiate clinical trials in 1994 aswell, Van Nostrand said.

Oncogene Science has applied for broad patent protection onthe compound and its applications.

OSI's stock gained 63 cents a share on Thursday to close at$4.50.

-- Jennifer Van Brunt Senior Editor

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