NOVO NORDISK/ANERGEN $25 MIL. R&D COLLABORATION

Executive Summary

NOVO NORDISK/ANERGEN $25 MIL. R&D COLLABORATION focuses on Type I diabetes, multiple sclerosis and myasthenia gravis, the companies announced Aug. 23, Novo Nordisk will fund research and development of Redwood City, Calif.-based Anergen's therapies designed to treat autoimmune diseases by inactivating ("anergizing") T cells responsible for the diseases. The two companies will share manufacturing costs and Anergen will receive royalties on any product sales. Anergen also has copromotion rights in North America for MS and MG therapies. Anergen received an immediate cash infusion of $8 mil. from the sale of 1.22 mil. shares to Novo Nordisk. The equity stake gives the Danish company a 17.5% ownership interest in Anergen. As of June 30, Anergen reported $5.7 mil. in cash on hand, which it estimated to be sufficient to fund operations through the first quarter of 1994. The company now has over $12 mil. in cash, which, combined with Novo Nordisk's research support, is expected to fund operations for at least two years. As part of the agreement, a research collaboration will be established between Novo Nordisk's wholly owned subsidiary ZymoGenetics in Seattle and Anergen. Novo acquired ZymoGenetics for $23.2 mil. in 1988. Novo Nordisk of North America President Harry Penner will joint Anergen's board. Anergen expects to file INDs for two AnergiX compounds to treat MS and MG by the first quarter of 1994. The company's diabetes research is earlier stage. Anergen believes that AnergiX compounds could be used to block T cells responsible for destruction of pancreatic islet cells in children and so reduce or eliminate the need for insulin injections. Anergen retains rights to all other indications for its compounds; the company is researching treatments for rheumatoid arthritis and allergies. For Novo Nordisk, which supplies a majority of the world's insulin, the agreement offers access to potential novel therapies for diabetes. The MS and MG research will also help Novo Nordisk with its ongoing efforts to broaden its research base, specifically into central nervous system research ("The Pink Sheet" Aug. 23, p. 16). Founded in May 1988 as Biospan, Anergen went public in October 1991 ("The Pink Sheet" Sept. 2, 1991, T&G-11). In July 1992, the company was issued what it characterizes as a "very broad" patent covering soluble Major Histocompatibility Complex class II-peptide compositions. In late 1992, the company reported that its compounds, in addition to inactivating target T cells, also can induce programmed cell death, potentially causing more durable responses in patients. In April, the company appointed former Cytel and Cetus exec Jeffrey Winkelhake, PhD, to VP-product development.