Bio-Technology General Corp. (BTG) announced Tuesday that ithas formed a new European marketing agreement with theFerring Group of Sweden for BTG's human growth hormone(hGH), replacing a similar agreement formed in 1988 withSmithKline Beecham (SKB).

BTG of New York formally terminated its agreement with SKBon Monday following a mutual decision announced in July toend the pact.

According to company spokeswoman Leah Berkovitz, SKBwanted to bring in a sublicensee to market BTG's hGH inEurope, which would have meant a drop in revenue for BTG."We didn't want a three-way deal," Berkovitz said.

The Ferring Group, a private pharmaceutical companyconsisting of 14 subsidiary companies throughout Europespecializing in hormonal drugs and peptide proteins, was one ofthe companies with which SKB had been negotiating asublicensing deal.

BTG said its agreement with Ferring is similar to the one it hadwith SKB and includes a 30 percent royalty on sales to BTG.

Berkovitz said she expects the $275 million European market togenerate more sales for BTG than its other markets -- Israeland South Korea -- combined. The company is unable to enterthe U.S. market until at least March 1994, when Eli Lilly andCo.'s hGH orphan drug exclusivity expires, Berkovitz toldBioWorld.

"At that time BTG's hGH for short stature indication should beapproved in the U.S." said Berkovitz. She said that BTG expectsto break even next year with hGH sales in Europe. "We have aslew of products, but expect hGH will be the one that puts us onour feet," she said.

David Blech of D. Blech and Co. in New York, who owns a 30percent stake in BTG, said he's "bullish" on having hGH enterthe European market. "Ultimately their sales will do better witha more motivated partner in a mid-size company; the deal ismore material to Ferring than to SKB," he said.

Robert Petersen, an analyst with Hanifen, Imhoff Inc. inDenver, said the termination of the SKB deal may affect BTG'searnings. He said he had thought BTG would be profitable in1993 based on predicted European sales of hGH in 1992 and1993.

"After SKB announced they wouldn't market hGH in Europe, Idowngraded BTG to a 'hold' and haven't made a change yet, asthe company won't have revenue in 1992 and only modestEuropean sales in 1993, assuming they donLt get to marketbefore June 1993," said Petersen.

Petersen said he is skeptical about BTG's ability to challengeLilly for market share for hGH in 1994, after Lilly's orphandrug status for hGH expires.

"Obviously Lilly will protect their position aggressively," hesaid. "I think it'll be a difficult marketing task for BTG, as Lillywill have an experienced sales and marketing staff in place."

-- Michelle Slade Associate Editor

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