WEST CHESTER, Pa. -- Cephalon Inc. said Tuesday thatSchering-Plough Corp. made a $4 million payment to continue acollaboration aimed at developing therapeutics for Alzheimer'sdisease.

Cephalon stock (NASDAQ:CEPH) closed Tuesday unchanged at$9.25 a share.

Under a 1990 agreement to develop therapeutics and otherneurodegenerative disorders, Schering (NYSE:SGP) of Madison,N.J., was to make up to $20 million in payments to support thecollaboration over five years. The most recent payment bringsto $14 million the amount that Schering has paid into theproject, according to Cephalon. Schering receives exclusiveworldwide rights to products and technology developed underthe pact.

The collaboration, now in its 25th month of operation, ispursuing two research programs. Their underlying strategiesare:

-- to spur the endogenous production of naturally occurringgrowth factor proteins in the brain, using neurotrophic factor-enhancing molecules (NEMs) and

-- to develop protease inhibitors to prevent the formation ofamyloid plaques in the brain that characterize Alzheimer's.

The Cephalon statement included enthusiastic remarks, but nodetails about progress, from executives of both companiesconcerning the project. Cephalon officials were traveling andcould not be reached for further comment Tuesday afternoon.A representative of Cephalon's outside public relations firmsaid that the project has identified an undisclosed number oflead compounds and that details about the research might bedisclosed at a company co-sponsored conference onAlzheimer's, scheduled for July in Italy.

"We have successfully advanced both research programs,"Frank Baldino Jr., Cephalon's president and chief executiveofficer, said in the company's statement.

"Our nerve growth and protease inhibitor project with Cephalonare progressing very satisfactorily," Frank Bullock, senior vicepresident of Schering-Plough Research Institute, said in thestatement.

Cephalon announced in March that it formalized an ongoingcollaboration with DNX Corp. of Princeton, N.J., to developtransgenic animal models that would exhibit the amyloidplaque deposits and aid in drug development. It said then thatits work on chymotrypsin-like protease (clipsin) inhibitors hadled to some compounds that were ready to test.

Other companies pursuing development of an Alzheimer'sanimal model include Scios Inc. and Athena Neurosciences Inc.

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