$600m in the pipeline for Arena?

Californian-based Arena Pharmaceuticals has entered into a world-wide collaboration and licensing agreement with Ortho-McNeil Pharmaceutical.

The deal, which could be worth over $600m to Arena, is to further develop compounds for the potential treatment of type 2 diabetes and other disorders. Arena expects that the initial focus of the collaboration will be on two Arena-discovered molecules in preclinical development.

Under the collaboration, Arena will receive an upfront payment of $17.5m and could receive up to $295m for achievement of pre-specified development, approval and sales milestones for each compound developed under the collaboration.

Arena is also eligible to receive low double digit royalties that will increase with increasing sales levels on worldwide sales of marketed products. In addition, Arena will receive research funding of $4.8m over two years. Johnson & Johnson Pharmaceutical Research & Development, an affiliate of Ortho-McNeil, will be responsible for future development and expenses for products resulting from the collaboration.

'The value and applicability of Arena's truly innovative drug discovery capabilities have been recognised by Ortho-McNeil Pharmaceutical,' stated Jack Lief, Arena's president and chief executive officer. 'The combination of our discovery capabilities with Ortho-McNeil's significant development and marketing resources and expertise, have great potential to help us achieve our goal of bringing first-in-class products to the millions of people with diabetes worldwide.'

About 19AJ Agonists

The compounds covered by the agreement modulate an orphan G protein- coupled receptor (GPCR) known as the 19AJ receptor. Arena scientists have identified the potential role of the 19AJ receptor in type 2 diabetes. This novel cell surface receptor is located primarily on pancreatic islet beta cells - the same cells that are the source of insulin in the human body. Arena has also discovered lead compounds that are selective agonists of this receptor. In animals, these small molecules increase the sensitivity of islet beta cells to increased levels of glucose, leading to increased insulin secretion; however, this activity only occurs under conditions of hyperglycemia. This is in contrast to the widely used sulfonylurea drugs, which cause insulin to be secreted even in the presence of normal or low blood sugar levels. The pharmacology of Arena's lead compounds has been tested in animals, and in those studies the compounds significantly improved oral glucose tolerance. When administered chronically to diabetic rodents, the compounds significantly reduced fasting blood sugar and glycosylated haemoglobin (HbA1c) levels. If proven safe and effective in humans, a 19AJ agonist has the potential to be the first in a new class of oral drugs for the treatment of type 2 diabetes, either as monotherapy or in combination with other drugs acting through different pathways.