Emisphere Technologies Inc. lost a partner for one oral hormone replacement therapy but will continue to work in tandem on another oral hormone program.

The Tarrytown, N.Y.-based company said Eli Lilly and Co. would return all rights to an oral recombinant human growth hormone (rhGH) program, which employed Emisphere's eligen delivery technology. But at the same time, Indianapolis-based Lilly reaffirmed that it would continue to fund development of the oral parathyroid hormone 1-34 (PTH 1-34) program, which also uses the eligen technology.

"We maintain that the rhGH program is an asset," Dory Lombardo-Valiquette, Emisphere's senior manager of investor relations and corporate communications, told BioWorld Today. "We have and will retain the early stage development capabilities that generated human data, [which] we will use for the potential partnering of the program."

The original partnership dates back more than six years, when Emisphere said it could gain up to $60 million in development milestones related to oral forms of two then-undisclosed endocrine proteins. Upon entering the multiyear research and option agreement, Lilly received exclusive worldwide commercialization rights to resultant products. (See BioWorld Today, Feb. 28, 1997.)

In June 2000, Emisphere received a $2 million payment when the parties decided to develop the products. Since that time, Lombardo-Valiquette said Emisphere has received a total of $7 million related to the oral rhGH program.

Lilly said it would discontinue its support of the program in an effort to prioritize products in its pipeline. But the company noted that proof-of-concept data point to the oral rhGH product's potential, a point echoed by Emisphere as it looks to continue forward movement of the human growth hormone product - most likely in a partnership.

"From what we have disclosed, we determined that there were no serious adverse events reported related to our eligen technology," Lombardo-Valiquette said. "And though the dose was not optimized, we did see a dose response."

Current rhGH products are delivered via injection, but Emisphere said the oral rhGH program demonstrated that eligen produces rhGH in blood levels exceeding physiological peak values in normal adults. Lombardo-Valiquette added that rhGH is the largest protein delivered in humans to date using eligen.

The delivery technology platform uses synthetic chemical compounds, called Emisphere delivery agents, to transport therapeutic macromolecules across biological membranes without altering the molecule's chemical form or biological integrity. The delivery agents use a body's natural passive transcellular transport process, allowing macromolecules to cross membranes while remaining therapeutically active. Once the drug crosses the membrane, the delivery agent dissociates from the drug, which re-establishes its natural distribution of conformations to retain its therapeutically active state, Emisphere said.

Lilly's commitment to the oral PTH 1-34 program follows on its success in developing an injectable version of the drug, Forteo, which the FDA approved late last year. Patients receive the osteoporosis drug through a daily injection, and Lilly's license agreement with Emisphere includes rights to the latter's patent portfolio covering oral PTH and dosage unit forms.

"We've done two human studies so far, and Lilly will decide on the next steps as they conduct any studies from here on," Lombardo-Valiquette said. "On the whole, this definitely validates the eligen technology as Lilly said it continues its commitment to our technology, in applying it to the PTH program."

On its own, Emisphere is developing several other oral formulations of drugs. In the quarter ended June 30, during which the company recorded an $11.4 million net loss, Emisphere said it planned to begin multidose clinical trials of recently formulated tablets of oral insulin.

In the spring, Emisphere ran into a problem when looking to partner the oral insulin program. Its stock dropped more than 40 percent in a day when it disclosed that a potential partner backed out of a deal to co-develop an oral insulin product. (See BioWorld Today, March 6, 2003.)

About a year before that, the company absorbed a prior stock hit when it reported failed Phase III trial results of an oral heparin product designed to treat deep-vein thrombosis in hip replacement surgery patients. Its shares fell more than 50 percent that day. At the time, Emisphere discontinued studies of its liquid heparin product - the only liquid-based product in its pipeline - but said it would continue to develop heparin in solid-dosage form. (See BioWorld Today, May 15, 2003.)

During the recently ended three-month period, which Emisphere closed with $57.7 million in cash, cash equivalents and investments, the company said it created an enhanced dosage of a solid formulation of oral heparin. It also continues to develop an oral, low-molecular-weight form of heparin.

Deeper in its pipeline, Emisphere said recent in vivo proof-of-concept studies showed that the eligen technology could orally deliver the PYY 3-36 peptide as an appetite suppression product.

In partnered projects, one of Emisphere's latest collaborations finds it working with the U.S. Army to develop an oral anthrax antigen. The company remains partnered with Basel, Switzerland-based Novartis Pharma AG on an oral salmon calcitonin for osteoporosis as well.

Emisphere's stock (NASDAQ:EMIS) lost 6 cents Tuesday to close at $3.76.