Magainin Pharmaceuticals Inc. and Sandoz PharmaceuticalsCorp. (SPC) announced Monday that they have signed a productdevelopment and co-promotion agreement to develop novelanti-cancer products from magainins.

Magainins are host-defense peptides that work by puncturingthe membranes of infected or diseased cells, causing those cells,including tumor cells in vitro, to lyse and die.

The agreement is for a minimum of 30 months and can beextended by Sandoz for another 12 months. The two companieswill "do all the basic research to turn magainins or new jointlyowned compounds into cancer products," explained Jay Moorin,Magainin's president and chief executive officer. "The first stepis to review over 2,000 compounds already made and tested atMagainin," Moorin told BioWorld.

"We have two ongoing projects in cancer: ovarian andmelanoma," Moorin said. "All that work will be transferredover to Sandoz in this agreement."

As well, Magainin and Sandoz scientists will jointly developnew compounds -- not necessarily magainins. Thosecompounds with promising anti-cancer activity go to Sandoz;the others go to Magainin to develop for treating, preventing ordiagnosing bacterial, fungal, parasitic or viral infections anddiseases. (Magainin's lead anti-infective compound is MSI-78,which kills various microorganisms, including Pseudomonasaeruginosa and Staphalococcus aureus. It is entering Phase IIclinical trials shortly, Moorin said.)

For the anti-cancer compounds developed under thisagreement, Magainin(NASDAQ:MAGN) of Plymouth Meeting, Pa.,will get milestone payments, royalties on product sales, and theright to co-promote such products in the U.S. and Canada. Thisgives Magainin the ability to "pick a very controllable nichemarket," which it can address with a small sales force, Moorinexplained.

For Sandoz of East Hanover, N.J., which has made a long-termcommitment to cancer research, this agreement with Magaininis a way "to explore novel approaches to cancer drug discoveryand development," said Daniel Hauser, president of the SandozResearch Institute. And the agreement provides Magainin witha necessary partner for the lengthy, expensive (as much as$200 million) process of developing a cancer therapeutic. "Overthe long term, this agreement will really build value for thecompany," Moorin said.

-- Jennifer Van Brunt Senior Editor

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