KAI Pharmaceuticals Inc. signed a potential $340 million deal expected to be announced today with Daiichi Sankyo Co. Ltd. for the global development and commercialization of KAI-9803.

As KAI's first pharma alliance since mid-2003, when it was founded on protein kinase C (PKC) modulation technology licensed from Stanford University, the deal with Sankyo not only provides the privately held South San Francisco-based company with an up-front cash infusion of $20 million, but also "paves the way for us to commercialize our own products someday," said Steven James, KAI's president and CEO.

KAI will retain the right to co-promote products in the North American acute care and hospital market.

Beyond the initial payment, KAI could receive development and commercialization milestones of up to $300 million for the first two indications for KAI-9803, plus milestones for other potential PKC inhibitors and a double-digit royalty.

Tokyo-based Sankyo agreed to fund all future development in exchange for global development and commercialization rights.

KAI also will continue to actively participate in further delta PKC inhibitor development. The company will have the option to perform certain clinical studies with KAI-9803, and KAI also could receive another $20 million over five years from Sankyo to identify new delta PKC compounds, routes of administration and indications.

"This target is really kind of a pipeline in itself," James told BioWorld Today, "and it would be too difficult for us as a small company to fully exploit it by ourselves." The deal provides KAI with both "access to Sankyo's deep cardiovascular expertise and the ability to conduct some development on our own."

The lead product, KAI-9803, a delta protein kinase C inhibitor, was granted fast-track status by the FDA and recently started enrollment in a 150-patient Phase I/II study (DELTA-MI) to evaluate the product's safety and efficacy in patients with acute myocardial infarction undergoing reperfusion via balloon angioplasty. Results from the trial are expected around the middle of the year.

KAI-9803 is designed to reduce the damage from reperfusion, or the reopening of blocked blood vessels, and is intended for an acute care setting.

When a patient arrives at the hospital with chest pains, and a blocked coronary artery is observed during an angiogram, the patient requires a balloon angioplasty to reopen the vessel and restore blood flow. But that reperfusion can "kick off a dual cascade of cell death, as well as necrosis in that injured heart tissue, which can lead to congestive heart failure, morbidity and, potentially, death," James said.

KAI-9803 is administered through the balloon catheter directly into the coronary artery just prior to reperfusion.

"What we showed in numerous animal studies is that [KAI-9803] can greatly reduce those damaging effects," he added. The drug showed an effect in size of the infarct and area of tissue death, and "we found that we could reduce that by a significant amount, up to 70 percent."

Preclinical work also demonstrated the drug's ability to improve microvascular blood flow following reperfusion.

KAI-9803 also might be effective in other ischemic indications, such as stroke.

KAI hopes to file an investigational new drug application this year for a second compound derived from its PKC modulation platform. Unlike KAI-9803, which inhibits the enzyme, this one would activate it.

The epsilon PKC activator "would be targeted for preconditioning, or protecting against ischemia in a number of surgical situations, such as coronary artery bypass graft surgery," James said.

"If a surgeon knows they're going to be creating ischemia by clamping off an organ or causing potential debris or emboli to go through the system and potentially block an artery, they can give this drug prior to that surgery to protect the tissue," he said.

KAI retains full ownership of the epsilon PKC program, and James said the company plans to advance it through proof of concept as rapidly as possible.

"Our goal is to be a leader in approaching PKC modulation," he said. "The PKC family is involved in a number of disease processes, and there's a potential for a very deep pipeline that we can develop in partnerships and on our own."

Besides ischemia, drugs targeting PKC also could be developed in neuropathic pain, oncology and inflammatory disease.