A trial begins today between diminutive Verex LaboratoriesInc. and Dupont Merck Pharma, a joint venture between thetwo pharmaceutical giants.

The plaintiff, Verex of Englewood, Colo., is a 13-year-oldpharmaceutical research and development company with just10 employees. Verex hopes to force Dupont Merck to permitthe manufacture of its timed-release AZT drug for expandedclinical trials, as the smaller company said Dupont Merck hadagreed to do.

In a Phase II pharmacokinetic trial this spring, the compoundkept cellular drug levels much more constant, if somewhat lesselevated, than equal doses of conventional Retrovir, principalinvestigator Alan Hollister, professor of medicine andpharmacology at the University of Colorado Health SciencesCenter, told BioWorld. Patients had to take the medicine onlytwice a day instead of six times. The daily dose was 600milligrams.

Furthermore, patients reported far fewer side effects on thetimed-release AZT, which Verex calls AZTEC. The AZT is packedin a pH erosion hydrogel polymer matrix.

But "the drawback of a study of this type is the patients knewwhich drug they were on," said Hollister. "So you have to take itwith a little grain of salt."

Nonetheless, the FDA was impressed enough with AZTEC thatlate this spring the agency placed it on expedited review.

Verex, however, lacked the facilities to manufacture thetablets. The key piece of equipment is a fluid bed dryer, usedto granulate the drug, James Petre, director of businessoperations for Verex, told BioWorld.

It is hard to find a dryer that is small enough to produceeconomically a total of 150 kg of drug, which Verex needed forthe trial in the three batches the FDA requires. The larger thedryer, the more costly the processing.

But Dupont Merck had a suitable dryer, and in May, Verex andDupont Merck began negotiations. Verex simply wanted to rentthe facility, as well as the time of a few Dupont Merckemployees, Petre told BioWorld.

Verex planned to begin testing the drug on the first of 230AIDS patients on Monday and had purchased the necessaryquantity of AZT, as well as other materials, which the companyhad moved to Dupont Merck's Garden City, N.Y., facility, saidHollie Baker of Hale and Dorr, the Washington, D.C., law firmrepresenting Verex. "Everything was in place and ready to go."

A trial run with Dupont Merck's equipment had even takenplace, James Dunn, president and chief executive of Verex, toldBioWorld. Then, on July 14, Dupont Merck backed out of thedeal, he said.

On Monday, Dunn said he hoped press coverage would putpressure on Dupont Merck to relent. But on Tuesday, Verexfiled suit, Baker told BioWorld.

"We filed a complaint against them in the superior court ofMineola County," Petre said. "The relief we asked for is forthem to go ahead (and allow use of their facility) as we hadagreed to. This is not a money issue."

Dupont Merck sees the situation differently, according to aspokeswoman. "We discussed various issues to the proposal,but no formal agreement concerning the manufacture of AZTwas ever signed," she told BioWorld. "Dupont Merck did notifyVerex to end negotiations last week."

Verex agreed that there never was a signed contract, but Petreand Dunn insisted that there was an oral agreement. And"under New York law, no written contract is necessary,"attorney Baker said.

If Dupont Merck did indeed back out of an oral agreement toallow Verex to use its facilities for a price, the question is,why?

"You can't pull out if no contract has been signed," the DupontMerck spokeswoman told BioWorld.

"They said they had been told by their general counsel thatthey couldn't do it, and then they started talking about acleaning validation procedure -- a red herring," Petre said.

Petre and Dunn suggested that Dupont Merck might havepulled out because Burroughs-Wellcome has patent rights toAZT. If so, perhaps things will change later this summer.

Burroughs recently sued Barr Laboratories and Novapharm forpatent infringement. The trial began in late June and isexpected to go well into August, with more than 200 witnessesscheduled to testify on both sides, Baker said.

Burroughs' case may be tenuous because much of AZT'sdevelopment took place at the National Cancer Institute, andlast year, Canada invalidated the patent.

Pending the outcome of its suit, Verex is also approaching otherpotential manufacturers both in the U.S. and abroad.

-- David C. Holzman Washington Editor

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