After a discovery collaboration yielded a preclinical compound, Nuvelo Inc. and the pharmaceutical division of Kirin Brewery Co. Ltd. decided to sign another agreement to advance the compound, NU206, into clinical development.

Nuvelo will receive a $2 million up-front payment from Kirin and takes the lead in worldwide development, manufacturing and commercialization of the compound, said Ted Love, president and CEO of Sunnyvale, Calif.-based Nuvelo.

"So now we are in charge of all the development issues," such as manufacturing and filing of the investigational new drug application, he said. "Nuvelo will pay 60 percent of the costs and Kirin will pay 40 percent of the costs," with that same ratio applying to potential profits of NU206.

Scientists with both companies identified NU206 as part of a long-term collaboration using Nuvelo's intellectual property involving secreted protein genes and Kirin's site-directed transgenic mouse technology. Researchers could engineer the human-secreted proteins that would be secreted into a mouse's circulation to determine whether the introduction of that protein provoked any biological effect.

"So we took 50 of our secreted proteins and began introducing them systematically into mice," Love said. The initial discovery of NU206 occurred during that process, when researchers found a mouse with a severely extended abdomen apparently caused by a stimulation of the epithelial cells.

"It became obvious to us very quickly that disorders where there is a problem with the epithelial cell line in the gut might be readily treated" with the compound, Love told BioWorld Today. NU206 was advanced into additional early studies in several disorders, such as radiation- or chemotherapy-induced mucositis and inflammatory bowel disease.

Love said he anticipates filing an IND for NU206 during the first half of 2006.

The discovery of NU206 also represented a "significant achievement" for Nuvelo as it is the first product candidate identified through its own internal research efforts, Love said, marking the company's final transition "from a genomics company to a company that actually develops therapeutics using genomics."

Before that, all of the products in Nuvelo's pipeline had been in-licensed for further development, such as alfimeprase, a direct-acting thrombolytic discovered by Thousand Oaks, Calif.-based Amgen Inc. The product is set to begin a Phase III program this year, with two trials evaluating alfimeprase in acute peripheral arterial occlusion and one trial in catheter occlusion.

Nuvelo's recombinant nematode anticoagulant protein, rNAPc2, which inhibits Factor VIIa/tissue factor, was licensed from Seattle-based Dendreon Corp. for $4 million in up-front fees, plus milestones and royalties. The product is completing a Phase IIa trial in acute coronary syndromes, and Nuvelo anticipates releasing top-line information during the first half of the year, with detailed results to be released during the second half.

Last year, Nuvelo licensed ARC183 from Cambridge, Mass.-based Archemix Corp. A direct thrombin inhibitor with anticoagulant applications, ARC183, will complete Phase I studies early this year. Love described ARC183 as a "short-acting anticoagulant," and said the goal of the Phase I trial is to "demonstrate the rapid onset of anticoagulation when the product is introduced and then, when the drug is turned off, the rapid spontaneous reversal of anticoagulation."

If Phase I studies show positive results, Nuvelo plans to initiate a program in coronary bypass surgery.

"It's particularly nice now to be able to round out an acute cardiovascular program with an emerging effort in oncology through NU206," Love said.

The NU206 agreement does not affect Nuvelo and Kirin's ongoing collaboration to discover additional compounds using secreted proteins. The companies agreed in September to extend the collaboration until Dec. 31, 2005. While Love said he is "optimistic" the agreement will result in additional therapeutic candidates, Nuvelo also is looking ahead to its independent drug discovery efforts.

"We have a significant internal research effort with secreted proteins, apart from Kirin," Love said. "We also have internal discovery for antibody targets, particularly for cancer."

At the end of 2004, Nuvelo had about $50.6 million in cash, cash equivalents and short-term investments, though it began this year by adding $68.3 million through a public offering of 9.8 million shares at $7.50 each to fund general purposes, including the upcoming trials of alfimeprase. (See BioWorld Today, Feb. 3, 2005.)

The company's shares (NASDAQ:NUVO) lost 32 cents Monday to close at $6.40.