SMITHKLINE BEECHAM BACKING CEPHALON CALPAIN INHIBITOR R&D WITH $25 MIL.

Executive Summary

SMITHKLINE BEECHAM BACKING CEPHALON CALPAIN INHIBITOR R&D WITH $25 MIL. in research payments for the intracellular enzyme neuroprotectants for stroke and other neurological disorders. Under a collaborative agreement jointly announced June 8, SmithKline Beecham will make research payments to Cephalon for the codevelopment of the calpain inhibitors, which are in preclinicals. In addition to the $25 mil. under the five-year, non-equity agreement, Cephalon also will receive options to copromote any commercialized products in the U.S., Europe and Japan and royalties on product sales in the rest of the world. Calpain, a normally inactive protease, is triggered by the cell injury that occurs with stroke or other neural injury. Calpain inhibitors as therapeutic agents would work by mediating the cell death that occurs in areas damaged by stroke or neural trauma. Cephalon is looking into the use of calpain inhibitors to limit the tissue damage following myocardial infarction. The company has been actively seeking a licensing partner for the calpain inhibitor program, which will require long-term and large-scale clinical trials and a large sales and marketing force for any successfully commercialized therapies. Cephalon's other strategic development partner is Schering-Plough, with which the R&D firm signed a $20 mil., five-year deal for the development of brain protease inhibitors as Alzheimer's treatments in June 1990. To date, Schering has paid out $14 mil. Cephalon, based in West Chester, Penn., went public in 1991. In April, the company netted proceeds of $20.5 mil. through a secondary offering. As of the end of April, Cephalon said it had access to over $85 mil., including $33 mil. from Cephalon Clinical Partners, a limited partnership created to fund the development of Cephalon's recombinant insulin-like growth factor-1 compound for Lou Gehrig's Disease, Myotrophin.