Isotechnika Inc. lined its coffers courtesy of a C$21.9 million (US$16 million) milestone payment following an achievement in the development of its lead product.

The funding stems from positive findings from a Phase II psoriasis trial of ISA247, a compound in development through a partnership with F. Hoffmann-La Roche Ltd. The Basel, Switzerland-based firm provided C$8.355 million in cash, with the remainder of the milestone paid in the form of a C$13.545 million equity investment.

"Part of the milestone payment will fund our portion of the development - we pay 30 percent," Randall Yatscoff, Isotechnika's president and chief operating officer, told BioWorld Today. "It also will be used for development of new compounds, so it will strengthen our pipeline and continue the development of ISA247."

Following its latest investment, Roche owns about an 11.6 percent stake in Isotechnika and is its largest single shareholder.

The double-blind, placebo-controlled trial produced positive results in terms of all primary and secondary efficacy and safety endpoints. Data from the high-dose arm showed that more than half the patients reached the primary efficacy endpoint - 54 percent achieved a two-point reduction on the Static Global Assessment score from baseline, compared to 17 percent in the low-dose group and none among placebo patients (p<0.0001).

Almost three-quarters of the 201 patients achieved the secondary endpoint, a 75 percent reduction in the Psoriasis Area and Severity Index from baseline. (See BioWorld Today, March 11, 2003.)

Yatscoff said the partners are developing plans for a Phase III program, with Roche initially dealing with manufacturing issues in advance of the large-scale trials.

"The majority of Phase III trials in psoriasis are a maximum of six months to study a number of different doses and responses," he added. "Has a final Phase III protocol been set and put together? No. But it's being worked on."

Yatscoff said the Phase III program would not begin before the end of this year.

Edmonton, Alberta-based Isotechnika joined hands with Roche just over a year ago to co-develop the calcineurin inhibitor. Long term, the arrangement could mean up to $215 million for Isotechnika, which is receiving license fees as well as development and commercial milestones along the way. Roche, which made an equity investment upon entering the agreement, is responsible for 70 percent of the shared development costs. The drug also is in Phase II development as an immunosuppressive therapy in kidney transplantation. If eventually commercialized, Isotechnika also would receive undisclosed royalties at escalating rates. (See BioWorld Today, April 10, 2002.)

That commercialization could come from multiple fronts if the drug's development proceeds successfully in other areas as well. Yatscoff said the deal was formed primarily to develop ISA247 as a transplantation drug.

An open-label Phase IIa study concluded in January in renal transplantation patients, although complete results from the randomized, three-month, 130-patient trial remain under analysis. But upon releasing its Phase II psoriasis data, Isotechnika Chairman and CEO Robert Foster told BioWorld Today that data from the study, which compared cyclosporine to ISA247 in patients who had been treated beforehand with cyclosporine for at least six months, showed that the investigational drug stabilized renal function.

"We've presented about 60 percent of the data set to the investment community, and I don't expect any surprises when we release the final data," Yatscoff said. "Everything has been so consistent with this drug."

Complete results are expected by the end of the quarter.

In March, Foster said the company's next trial would study ISA247 in newly transplanted kidney patients who have not been exposed to cyclosporine. He also said the company expects to study the drug in liver transplantation patients as well as other transplantation indications.

Isotechnika and Roche opted to cancel a planned Phase II trial in rheumatoid arthritis a month after entering their partnership. (See BioWorld Today, May 13, 2002.)

Beyond ISA247, Isotechnika is developing other classes of immunosuppressives. Yatscoff said the company would soon release data detailing the drugs, including news of two autoimmune compounds from different classes designed to operate with fewer side effects than current drugs.

Isotechnika's stock (TSX:ISA) gained C5 cents Friday to close at C$3.07.