Sepracor Inc. said Thursday that it has reached agreementswith Marion Merrell Dow (MMD) worth an aggregate of $17.5million.As part of the agreement, MMD (NYSE:MKC) of Kansas City, Mo.,has invested $10 million in Sepracor, which gives it slightlyunder 6 percent equity in the Marlborough, Mass., company,according to Nancy Gray, director of business development forSepracor's pharmaceutical division.MMD also is paying Sepracor $7.5 million in royalties relatingto a patent on a metabolite of the popular antihistamine drugSeldane (terfenadine), which was developed by MMD.

Sepracor, which develops new and proprietary forms of best-selling drugs, has applied for a U.S. patent on the use ofterfenadine carboxylate (a metabolite of terfenadine) as a non-sedating antihistamine with reduced side effects.Sepracor (NASDAQ:SEPR) has licensed to MMD the exclusiverights to its use patent on the metabolite, for which it willreceive license fees totaling $7.5 million against certainundisclosed milestones, as well as potential royalties on MMD'ssales of the product.

MMD already has a composition-of-matter patent on themetabolite, which expires in 1998, Gray told BioWorld.Sepracor's use patent application, if awarded, could extend thelength and scope of MMD's coverage under its composition-of-matter patent. MMD apparently has also filed a use patent forthe compound, but "hasn't shared the nature of that use patent"with Sepracor, Gray said.

"This agreement with Marion Merrell Dow...validates ourstrategy to work with innovator companies in extending theirpatent franchise for large-selling drugs," said TimothyBarberich, president and chief executive officer of Sepracor.

Sepracor's stock was up $1 a share on Thursday, closing at$8.50.

-- Jennifer Van Brunt Senior Editor

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