The Liposome Company Inc. (TLC) said Monday it reacquiredworldwide rights to its anti-fungal drug, TLC ABLC, licensed tothe Bristol-Myers Squibb Co. (BMS) in 1986.

Specific terms of the deal were not disclosed, but EdwardSilverman, TLC's vice president for strategic planning andbusiness development, said the company will negotiate withBMS to establish BMS's marketing participation for TLC ABLC.If the two companies are unable to agree on terms, BMS willreceive royalties on the drug from TLC.

Silverman said TLC had been in discussions with BMS for sometime about continuing the development of TLC ABLC. "We thinkwe can get the product to market faster," he said. "Weunderstand the technology better, we'll be able to focus ourattention on the drug's development more effectively, and theeventual financial benefit to the company will be greater."

TLC's new version of TLC ABLC consists of amphotericin B in alipid complex. Silverman said the new version is safer thanconventional amphotericin B and may be able to overcome sideeffects associated with the conventional form, including kidneytoxicity and anemia .

The lipid complex holds the drug in an active form so that thehealthy cells are not exposed, then releases the drug so that itbecomes active when it's exposed to fungal cells, Silverman toldBioWorld. "It's an elegant form of targeting the drug at thefungus and away from healthy tissue," said Silverman.

"The development of the product will be expensive, but we'reconfident we can do it expeditiously and successfully," he said.The Princeton N.J., company (NASDAQ:LIPO) has close to $80million in cash and a manufacturing plant.

Under the previous agreement, BMS was entirely responsiblefor the clinical development and regulatory planning of thecompound, including manufacturing clinical supplies -- "justabout everything but some of the pharmaceuticaldevelopment," said Silverman.

Ongoing, randomized, comparative U.S. Phase II/III clinicaltrials of TLC ABLC for systemic candidiasis in cancer patientsreceiving chemotherapy are being performed in 80 patients at34 sites and should be completed in mid-1993, according toTLC. The company hopes to begin Phase III trials in the firstquarter of 1993 in 360 patients at between 35 and 50 centers.

TLC ABLC has been used in a U.S. compassionate-use programin 90 patients with varying types of fungal infections who hadnot benefitted from conventional therapy. Although theprogram does not constitute a controlled trial, Silverman saidsome of these patients have had dramatic results, includingtotal recovery. Silverman said the drug has also shown safetyin doses far greater than with the conventional form of thedrug.

Silverman would not predict when the drug would reach themarket. "We're reviewing the whole clinical and regulatorystrategy now," he said.

Alexander Nalle, an analyst with Philadelphia Investors inPhiladelphia, said the reacquisition is a good deal for TLC,especially since it appears that TLC isn't spending any moneyto reacquire the rights.

"It makes more sense that the drug is in the hands of acompany that is smaller and cares more about its progress,"Nalle said. "It seemed to have been floundering in the hands ofBMS, who said it was a terrific drug but that it doesn't rank ithigh on BMS's priority list."

Nalle's estimates the 1992 U.S. fungal infections market at $300million, and the non-U.S. market to be almost the same.

"It's much better than the drug it's designed to replace, BMS'sFungizone, because it's shown less toxicity and moreeffectiveness in Phase II/III trials," said Nalle.

Hambrecht & Quist analyst D. Larry Smith repeated his "buy"recommendation on the stock, saying the reacquisition ofworldwide rights to TLC ABLC could be an "enormously positiveeconomic event."

-- Michelle Slade Associate Editor

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

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