Genzyme Corporation, a global biotechnology company, and Procter & Gamble Pharmaceuticals, Inc. (P&GP), a subsidiary of The Procter & Gamble Company, announced an agreement under which P&GP will develop and market Genzyme's investigative drug candidate RDP58 for the treatment of gastrointestinal and other disorders. P&GP will begin to evaluate RDP58 for the treatment of inflammatory bowel disease (IBD), initially focusing on clinical trials in ulcerative colitis.

Under the agreement, Genzyme will grant P&GP an exclusive worldwide license to develop, manufacture, and commercialize RDP58, in exchange for an upfront fee, milestone payments, and royalties on product sales. Genzyme will retain development and commercialization rights to RDP58 in pulmonary and other disorders not specifically licensed to P&GP. Genzyme will also retain co-promotion rights with P&GP in oncology-related disorders, such as chemotherapy-induced diarrhea.

P&GP will make early payments to Genzyme of up to $10 million, and will fully fund the worldwide development of RDP58 through commercialization for GI and other disorders licensed in the agreement. Genzyme may also receive additional payments upon the successful completion of certain development milestones, and upon regulatory filing and approval worldwide.

"P&G Pharmaceuticals is an undisputed leader in the development and commercialization of effective treatments for gastrointestinal diseases, and is a strong strategic partner for Genzyme," said Henri A. Termeer, chairman and chief executive officer, Genzyme. "P&GP brings to the development of RDP58 exactly what we were seeking in a partner: proven product development skills, specialized sales capabilities with gastroenterologists and general practitioners, and a long-term commitment to meeting the needs of patients with gastrointestinal disorders."

"Our agreement with Genzyme helps us achieve our goal of continuing the GI franchise we have established with Asacol," said Mark Collar, Global president of P&GP. "As a leader in treating GI disorders, we welcome this opportunity to develop one of the new, exciting therapies in the GI field today, which will potentially advance the care of patients suffering from inflammatory bowel disease."

P&GP has gained substantial scientific, clinical and commercial expertise in the IBD field through its extensive experience with Asacol, the leading therapy for the treatment of mild to moderate ulcerative colitis and the maintenance of remission. P&GP continues to advance the IBD field through ongoing clinical trials, substantial funding of IBD research, and innovative patient education and awareness programs.

Genzyme obtained RDP58 in the acquisition of SangStat Medical Corp. in September of 2003. At that time, the company announced its intention to work with a partner to develop this product candidate for gastrointestinal disorders, a large market opportunity that falls outside of Genzyme's strategic focus.

This agreement is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Many cellular inflammatory pathways are activated in IBD, contributing to the pathogenesis of disease. RDP58 has a novel mechanism of action that inhibits several key inflammatory pathways. RDP58 would be administered orally to patients with IBD, and if successfully developed and approved by regulatory bodies, this would offer patients a convenient dosing option.

SangStat investigated the potential utility of RDP58 in the treatment of IBD through two Phase IIa clinical trials. A total of 230 patients were enrolled in these randomized, blinded, placebo-controlled, multi-center studies. The results supported the potential use of RDP58 for ulcerative colitis in this patient population.

Because RDP58 inhibits the inflammatory cytokines TNF-alpha, interferon-gamma, IL-12 and IL-2, it may have utility in a wide range of therapeutic areas. Additional applications licensed to P&GP include periodontal, topical, ocular, and urogenitary disorders.

IBD encompasses the gastrointestinal (GI) disorders of Crohn's disease and ulcerative colitis. IBD is characterized by chronic inflammation of the GI tract. Approximately one million Americans suffer from IBD, those cases being roughly evenly divided between Crohn's disease and ulcerative colitis. Consistent management of the disease is essential to keep the condition from worsening. Without appropriate management, IBD can be debilitating and can potentially lead to serious consequences including colon cancer.