NeoRx Inc. expects to formally announce today the start of botha clinical trial and a strategic collaboration focused on a coloncancer therapeutic that targets malignant cells with acompletely human monoclonal antibody (MAb).

NeoRx of Seattle said its partner, Organon International B.V.,will finance clinical trials of the therapeutic, which thismonth entered a Phase I clinical trial at the Virginia MasonMedical Center in Seattle. In addition, Organon agreed to makelicensing and milestone payments to NeoRx that could exceed$5 million.

The collaboration pairs NeoRx's proprietary rheniumradiotherapy technologies with the completely human MAbsproduced by BRI of Rockville, Md., a research facility operatedby Organon Teknika, a related business that is part of thepharmaceutical division of Akzo of the Netherlands. Under theagreement, Organon receives worldwide rights to any resultingproducts, on which it would pay NeoRx an undisclosed salesroyalty.

The agreement is part of wider changes afoot at 8-year-oldNeoRx which -- after a cost-slashing reorganization in late1990 -- it hopes will get it on the road to profitability by themid-1990s.

"A lot of the things that turned out to be bad luck we've shoredup," Paul G. Abrams, NeoRx's president and chief executiveofficer, said Thursday. "We cut our expenses by 40 percent andwe've kept that expense rate fairly stable for the last year.Given that, it's not going to take a huge amount of revenue toget us to the break-even, or near-break-even point."

Abrams steers clear of forecasting NeoRx's profits or atimetable for its products to reach the market. The companyposted a $8.8 million loss, 39 cents a share, for the first ninemonths of this year.

NeoRx's strategy is to construct deals that will help bringproducts to market while focusing on its strengths indeveloping MAbs-based therapeutics for treating breast, colonand lung cancers., Abrams said. "When we reach a criticalnumber of products," he said, "we can forward-integrate intomarketing."

NeoRx has ridden a recent wave of positive announcements.Within the past seven months, it has:

-- Resolved in June a dispute with Eastman Kodak's SterlingWinthrop division over an early collaboration that a little morethan a year ago appeared to be headed for court.

-- Signed Germany's Boehringer Ingelheim GmbH in May to acollaborative and equity investment agreement. Boehringer isto make and market overseas what NeoRx sees as its firstapproved commercial product, the OncoTrac cancer-imagingproduct. It kept U.S. marketing rights.

-- Exclusively licensed last February a MAbs-basedtherapeutic technology from Stanford University that isshowing promise in delivering a stronger punch to malignantcells while reducing the risks from misdirected radioisotopes.

The Stanford technology is expected to play a key role insetting the future course of the company's development ofMAbs-based therapeutics, said Robert Littauer, NeoRx's chieffinancial officer.

In a conventional MAbs-based therapeutic, a MAb designed totarget a diseased cell is linked to a toxic agent that isintended to kill the cell. Some misdirected therapeuticmolecules, however, often radioactive, end up in the bonemarrow.

The goal of the new technique is to lengthen the circulatingtime for the MAbs, improving their chances of attaching to adiseased cell while limiting the patient's exposure toradioisotopes. The method links the targeting MAb to avidin, anon-toxic molecule, which can circulate in the body for morethan day. A second step is to inject a rhenium isotope labelledwith biotin, which has a high binding affinity for avidin.

"In the mouse model, we're getting good results," Littauersaid. The approach has delivered a threefold improvement inthe therapeutic index (a ratio of the number targeted tumorcells killed to the number of healthy bone marrow cells killed),compared with a conventional MAb.

NeoRx aims to file in early 1993 with the FDA an applicationto start clinical trials using the new approach, Abrams said.One issue facing the company is how much data from priorstudies of the MAb tagged with rhenium can be used in seekingregulatory approvals for the two-step approach.

"I don't think it makes any sense to speculate as to what'srequired," Abrams said. However, Littauer makes the case that"the therapeutic agent does the same thing in the same place.All you're really doing is breaking this product into twopieces."

NeoRx seeks a different advantage in its Organon collaboration.Conventional murine, or mouse-sourced, MAbs can provoke apatient's own antibody response, which can limit patients to asingle dose of MAbs therapeutics. "Organon's human antibodiesmay make it possible to administer multiple courses oftreatment," said Darrell Salk, NeoRx's vice president ofmedical and regulatory affairs.

NeoRx also has collaborative agreements with Genentech Inc.for a breast cancer therapeutic and with Bristol-Myers Squibbin small- cell lung cancer.

-- Ray Potter Senior Editor

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

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