Privately held Arris Pharmaceutical Corp. is entering acollaboration with Kabi Pharmacia AB of Sweden that could beworth more than $30 million.

The South San Francisco, Calif., company will be eligible formilestone payments and any royalties on synthetic, orallyactive versions of cytokines that the pair may create to treatinflammatory disease. Kabi will fund research anddevelopment and commit its own staff to the three-year,renewable research and development project.

In return, Kabi is taking an equity stake in the 4-year-oldcompany and gains the right to develop any compoundsdiscovered, as well as worldwide manufacturing and marketingrights. The exact structure of the agreement was not disclosed,although the existing group of investors -- primarily venturecapitalists -- remain majority shareholders, John Walker, Arris'president and chief executive officer, told BioWorld.

In a second multiyear agreement with Kabi, Arris will apply itsproprietary rational drug design technology, which relies onartificial intelligence strategies such as those used in roboticsand defense, to assist Kabi in another pharmaceutical program.This agreement could also bring royalties to Arris, Walker said.

The agreements arose partly because the chief technical officerand former chief executive of Arris, Michael Ross, previouslycollaborated with Kabi while working at Genentech Inc. ofSouth San Francisco, where he assisted in development ofProtropin, the company's recombinant human growth hormone.Kabi, Walker said, is a leading worldwide supplier of growthhormone.

Growth hormone and a family of cytokines all act throughreceptors that share a close structural relationship. Thesecytokines represent more than half of all biotechnology drugsmarketed to date, and include such compounds aserythropoietin, human growth hormone and alpha interferon.

Arris' advisory board member Harvey Lodish of the WhiteheadInstitute was one of the researchers who discovered how manycytokines apparently work by bringing two halves of areceptor together.

With Lodish, Arris has developed assays that detect substancesthat create receptor dimers and others that interfere with thisaction.

Walker said that through the Kabi collaboration "we canbroaden our overall technological base in cytokine mimetics,"gaining knowledge, technology and skills to complement theexisting focus on inflammation.

Arris is already working on a proprietary compound to treatasthma. The drug candidate is intended to relieve late-stageinflammation triggered by mast cells hours after exposure toan antigen, Walker said. The compound, APC366, may besubject to an investigational new drug application later thisyear, and has other potential uses in such indications asrheumatoid arthritis and inflammatory bowel disease.

-- Nancy Garcia Associate Editor

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

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