Start-up firm Retinagenix LLC signed its first deal, partnering its early stage synthetic retinoid program with QLT Inc. to develop drugs in the area of degenerative retinal diseases.

Both companies will be involved in the research part of the collaboration, and QLT will handle all development and commercialization responsibilities for compounds beginning with a lead preclinical synthetic retinoid aimed at treating Leber congenital amaurosis (LCA), a condition that primarily affects pediatric patients and can lead to blindness. In exchange, Retinagenix will be entitled to an up-front payment of $1.5 million, plus development, regulatory and sales milestones, and a single-digit royalty on net product sales.

The deal is a first for Seattle-based Retinagenix, which was spun out from the University of Washington in March 2004 by retinal disease specialists David Saperstein and Krzysztof Palczewski, and entrepreneur Marco Northland.

With seed money in the form of a donation to the University lab, the three founders focused on progressing "the technology to the point where we could sign this co-development agreement with QLT," Saperstein told BioWorld Today. "Once we had the lead compounds, we sought out a partner for further development, and QLT has the clinical expertise."

The lead compound, a synthetic retinoid to treat LCA, is designed to act on biochemical pathways to preserve retinal function. Work at the University of Washington lab found that one of the mutations that caused LCA occurred in retinal pigment epithelium 65 (Rpe65), a protein involved in the production and recycling of 11-cis-retinal. When that mutation occurs, the naturally occurring retinoids are blocked from completing the vision cycle.

Vitamin A has been a potential treatment for LCA, but often is not effective, since "it hits the same roadblock," Saperstein said, adding that the accumulation of Vitamin A actually could make the disease worse.

Some potential gene therapy alternatives are in early development, but Retinagenix's oral compounds could end up being more effective in treating the entire eye, Saperstein said.

Work stemmed from "a well-understood disease pathway," he said. "It's really the blending of more traditional pharmacology with the biotechnology that's more modern."

For QLT, the addition of the synthetic retinoid program "fits nicely into our core skills and capabilities," said Bob Butchofsky, president and CEO of Vancouver, British Columbia-based QLT.

The compounds are about 18 months from the clinic in the lead indication. Beyond LCA, the synthetic retinoids could be investigated in other orphan indications, such as retinitis pigmentosa, or possibly the larger age-related ocular degenerative market.

"This deal is the first step for us since we expressed an interest from a strategic standpoint to really focus on ocular diseases, an area where we've had our greatest success," he added.

QLT is known for Visudyne (verteporfin) photodynamic therapy, the first product to hit the market for treating wet age-related macular degeneration. Since its FDA approval in 2000, Melville, New York-based OSI Pharmaceuticals Inc.'s Macugen (pegaptanib sodium injection) has joined the mix, and South San Francisco-based Genentech Inc.'s VEGF inhibitor, Lucentis (ranibizumab), could win approval this year.

QLT has spent time developing drugs for other indications, such as its marketed product Eligard, an extended-release injectable depot for prostate cancer. But the company recently refocused efforts to "spend more time in ocular diseases, which is really our core therapeutic focus," Butchofsky said.

Retinagenix's synthetic retinoid program also will help build up QLT's development pipeline. Earlier this year, the company reported a missed Phase II efficacy endpoint with its photosensitizer for benign prostatic hyperplasia. Results from that study are under further review. (See BioWorld Today, Feb. 17, 2006.)

"We're very excited to be partnering with [Retinagenix]," Butchofsky said, "and we're looking to gain access to more innovative therapies, particularly those to address unmet medical needs."

Shares of QLT (NASDAQ:QLTI) closed at $7.52 Wednesday, down 10 cents.