National Editor

With two Phase III trials under way testing its treatment to prevent vein-graft failure after surgery, Corgentech Inc. is joining with Bristol-Myers Squibb Co. in a deal that's expected to get revenue flowing better.

"This really allows us to put more muscle on the commercialization piece," said John McLaughlin, president and CEO of South San Francisco-based Corgentech. "They're really interested in the space and willing to dedicate a sales force to it." He added that BMS, of New York, was selected from a list of three finalists.

Under the terms of the agreement focused on the E2F Decoy (edifoligide sodium), BMS is paying $45 million to Corgentech in cash and equity up front. Another $205 million could come as clinical and regulatory milestone payments.

BMS and privately held Corgentech are sharing development costs in the U.S. and Europe going forward, based on a pre-agreed percentage allocation. In the U.S., the companies will co-promote E2F Decoy and share profits, with rights in all other countries going to BMS, which will pay Corgentech a royalty on sales.

Importantly, McLaughlin said, Corgentech could get still more from BMS in milestone payments if certain sales levels are achieved.

"It's a very good-sized number," he said of the milestones, although terms of the deal prohibited him from disclosing exact figures.

E2F Decoy, an oligonucleotide, is applied to vein grafts ex vivo and strengthens them over time.

"The cells in the middle of the vein lengthen and thicken like a muscle that's been exercised," McLaughlin told BioWorld Today. "The drug actually causes the vein to thicken and look like an artery. It's a one-time treatment, and most of the remodeling is done in a couple of weeks. We can't find anything else out there like it."

Neither can the FDA, which has granted the product fast-track status in coronary and peripheral indications.

E2F Decoy is in a Phase III study, called PREVENT 3, in 1,400 patients who have had peripheral artery bypass surgery. It is in another Phase III trial, called PREVENT 4, evaluating the treatment in 2,400 patients who have had coronary artery bypass graft (CABG) surgery.

The CABG trial, which began just more than a year ago, completed enrollment in September, and the other trial was enrolled in August, McLaughlin said. Both are expected to finish in the fall of next year. (See BioWorld Today, Aug. 15, 2002.)

McLaughlin said the market is more than 1 million worldwide in both indications, with about 6,300 surgeons doing the procedures in the U.S., all in hospitals. About 90 percent of the CABG operations are done in 700 hospitals, which nicely isolates the target market, he noted.

Had the deal with BMS or another partner not come through, "we would have gone out and raised some more private money or thought about going public," McLaughlin said. "We're still thinking about going public."

In the summer of 2002, Corgentech raised $50 million in a Series C financing that it said at the time would last through the first or second quarter of 2004. (See BioWorld Today, July 17, 2002.)