Athena Neurosciences Inc. on Tuesday said it has reached anagreement with Eli Lilly & Co. to extend for another five yearstheir collaboration to develop treatments for Alzheimer'sdisease.

During its first three years of collaboration with Athena, Lillyspent about $8 million in stock purchases and contractpayments under an agreement that would have expired on Oct.31. Under terms of the extension, Lilly will provide increasedresearch funding of an undisclosed amount and invest anadditional $4 million in the South San Francisco, Calif.,company, bringing Lilly's total holding to about 8 percent ofAthena's outstanding stock. Further financial details were notdisclosed.

Lilly has exclusive rights to any product arising from thecollaboration, which is focused on products to inhibit thedeposition of amyloid plaque in the brains of Alzheimer'svictims.

Also on Tuesday, Athena said it has filed for approval for aPhase III clinical trial of the anti-spasticity drug, tizanidine,which it had licensed from Sandoz Pharma Ltd.

Sandoz sells tizanidine in Japan and Europe. Athena will haveexclusive rights to market the drug in the United States andCanada, and will pay royalties on sales to Sandoz. The companyestimated that 75,000 U.S. patients with multiple sclerosiscould benefit from tizanidine.

Athena, which filed for an initial public offering at thebeginning of this month, also has a license to an anti-convulsant to treat epilepsy that is now in Phase II trials.

In addition, the company signed a three-year researchcollaboration in August with Wyeth-Ayerst to develop drugsbased on Athena's technology for blocking the flow of whiteblood cells across the blood-brain barrier. -- RobertaFriedman, Ph.D.

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