By Charles Craig

American Home Products Corp. agreed to pay Biomatrix Inc. up to $23 million for rights to market its osteoarthritis knee treatment, Synvisc, in the U.S. and certain European countries.

Synvisc is a viscous material derived from hyaluron, a natural lubricant and shock absorber. It is injected into knees to supplement synovial fluid and to provide protection for damaged joints. The product, which is made in liquid and gel forms, will be sold by the Wyeth-Ayerst division of Madison, N.J.-based American Home Products.

Synvisc has been cleared for marketing in Europe. It was recommended for approval in the U.S. by an FDA advisory panel in November 1996. (See BioWorld Today, Nov. 22, 1996, p. 1.)

Biomatrix, of Ridgefield, N.J., will receive $4 million up front from American Home Products and another $19 million based on FDA approval of Synvisc and market launches in Europe and the U.S.

In addition, Biomatrix will manufacture Synvisc for American Home Products and copromote the treatment. The pharmaceutical company agreed to support a technical team from Biomatrix for up to five years to help introduce Synvisc and educate doctors about its use.

Patients with osteoarthritis of the knee experience decreases in the amount of hyaluron in their synovial fluid, making movement difficult and painful.

Biomatrix derives hyaluron for Synvisc from the combs of chickens. The hyaluron is extracted, purified and formed into either hylan A, a fluid, or hylan B, a gel. The product is classified as a device.

Synvisc is sold in Canada by Rhone-Poulenc Rorer, of Collegeville, Pa., and in Sweden by Roche Holding Ltd., of Basel, Switzerland. In 1996, sales in Sweden totaled $3 million and in Canada, where it was launched in March, sales were about the same amount.

In addition to the U.S., Wyeth-Ayerst has rights to sell Synvisc in Germany, Austria, Spain, Portugal, Greece and other countries in Central Europe and the Middle East.

Biomatrix has an agreement with Boehringer Ingleheim GmbH, of Ingleheim, Germany, for sales in France.

Rory Riggs, Biomatrix president, said Synvisc should be on the market throughout Europe by June 1997.

Synvisc's approval in Canada in 1993 was Biomatrix's first medical product to gain market clearance.

Biomatrix's stock (NASDAQ:BIOX) closed Monday up $1 to $16.25. *