Epix, Schering strike R&D alliance to develop new MR contrast agents

Vascular imaging serves as near-term focus

Frequent partners Epix Medical and Schering have joined forces again. This time they've announced a multimillion-dollar alliance aimed at discovering, developing, and bringing to market new molecular-based, disease-targeted contrast agents for MRI.

The agreement, made public May 27, includes two primary areas of collaboration. First, the deal creates an exclusive development and commercialization partnership regarding EP-2104R, an MR contrast agent targeted at the molecular level to address vascular disease. Second, it establishes an exclusive research partnership aimed at discovering new compounds for use in MRI.

"We set out to structure a deal that would give us significant nondiluted funding over the next several years, while allowing us to maintain a major participation in the downstream economics for the products we generate," said Michael D. Webb, CEO of Epix. "We did better than that. We found a way to potentially double our output by combining early-stage pipelines with Schering in a novel research collaboration."

Over the last three years, the two companies have struck several deals. In May 2000, Epix of Cambridge, MA, granted Berlin-based Schering a worldwide, nonexclusive, royalty-bearing license for the sale of Eovist, an investigational MRI contrast agent for liver imaging. (Massachusetts General Hospital owns the underlying patents but had licensed them exclusively to Epix.) The Cambridge company later licensed these same patents to Bracco in regard to the Italian company's Multihance contrast agent (SCAN 10/3/01).

In June 2000, Schering agreed to pay Epix $10 million cash up front and $20 million in milestone payments for the exclusive right to codevelop and sell MS-325, Epix's premier vascular agent. Japan was the only market excluded from this deal, but it was included a year later under a separate agreement between the two companies.

The latest collaboration is scheduled to run until 2006, although the two companies can extend the program for an additional two years. Epix will conduct early development activities for EP-2104R. Schering will fund the effort up to $9 million. The German company has committed an additional $4 million in R&D funding over the next two years and a loan of up to $15 million. In return, Schering will have the option to purchase exclusive worldwide marketing rights for any products emerging from the alliance.

Epix will begin the program by executing a clinical feasibility study in humans. At its conclusion, Schering may opt to develop EP-2104R, receiving an exclusive worldwide license for the agent while becoming responsible for all further development, manufacturing, marketing, and sales.

The companies will combine their MR-oriented research programs as part of a broader research collaboration to develop novel agents. They will hold joint ownership of all intellectual property generated by this program for three to five years. Schering will fund a portion of the personnel and third-party research costs incurred by Epix.