Cephalon Inc. strengthened its ties with Kyowa Hakko Kogyo Co.Ltd., announcing Thursday that the multibillion-dollar Japanesecompany has agreed to develop and market Myotrophin inJapan.

Kyowa Hakko of Tokyo will fund all product developmentactivity in Japan of Myotrophin, Cephalon's recombinant humaninsulin-like growth factor-1, which is now in Phase II/III trialsin the U.S. for treating amyotrophic lateral sclerosis (ALS, orLou Gehrig's disease).

Kyowa will conduct the clinicals in Japan as well as seekregistration in that country to market the product for treatingneurological diseases.

For its part, Cephalon (NASDAQ:CEPH) will be paid licensingfees, milestone payments and certain royalties. The WestChester, Pa., company also receives the option to co-promoteMyotrophin with Kyowa Hakko in Japan. Cephalon ClinicalPartners, L.P., which the company formed last summer, has therights to market Myotrophin in the U.S., Canada and Europe.

Cephalon and Kyowa Hakko have been partners since 1991,when Kyowa Hakko granted Cephalon the right to evaluate itssmall neurotrophic molecule compounds, the K252 series, forpotential neurological activity, explained Lyn Hyduke,Cephalon's assistant director of corporate communications.

Cephalon also had an option to in-license the K252 series,which it exercised in June 1992. Under that agreement, Kyowa"owned" the products and Cephalon had the development andmanufacturing rights to any products.

But now the two companies have amended that 1992agreement. Whereas Cephalon previously had marketing rightsto the compounds in the U.S. and Kyowa Hakko retained therights in Japan, Cephalon now has an option to co-promote theK-252 compounds in Japan. Both companies still sharemarketing rights for the rest of the world. -- Jennifer VanBrunt

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