Maxygen, Inc. a biotechnology company focused on the development of improved protein drugs, announced the initiation of a phase I clinical study to evaluate a next-generation CTLA4-Ig therapeutic (designated as ASP2408) that is being developed by Perseid Therapeutics LLC, Maxygen’s majority-owned subsidiary, in collaboration with Astellas Pharma Inc. for the treatment of rheumatoid arthritis and potentially other autoimmune indications. It is the first clinical trial being conducted under Perseid’s collaboration with Astellas, which is sponsoring the clinical trial. Perseid has earned a $10 million payment from Astellas for the achievement of this clinical milestone.

The clinical trial is a phase 1, randomized, double-blind, placebo-controlled, dose escalation study. The primary objective of the study is to assess the safety, tolerability, and pharmacokinetics of single ascending intravenous doses of Perseid’s CTLA4-Ig therapeutic in healthy male and female subjects.  The secondary objective of this study is to evaluate the pharmacodynamics of the CTLA4-Ig therapeutic. The trial will take place at one centre in the United States and is designed to enroll 65 subjects in eight dose cohorts.

“The advancement of our CTLA4-Ig therapeutic into clinical trials represents another important milestone for Perseid achieved in collaboration with Astellas,” said Grant Yonehiro, president and chief executive officer of Perseid.

Perseid’s CTLA4-Ig product candidates are designed to be superior, next-generation CTLA4-Ig therapeutics for the treatment of a broad array of autoimmune disorders, including rheumatoid arthritis, and transplant rejection. By binding to human B7 ligands with high avidity, CTLA4-Ig fusion proteins inhibit B7-mediated co-stimulation of T cells via the CD28 receptor, thereby decreasing activation of T cells and thus decreasing immune system activation.

In preclinical studies, Perseid’s CTLA4-Ig product candidates have demonstrated improved potency as compared to Orencia (Bristol-Myers Squibb Company). Orencia, a currently marketed product, is indicated for reducing signs and symptoms, inducing major clinical response, slowing the progression of structural damage, and improving physical function in adult patients with moderately to severely active rheumatoid arthritis who have had an inadequate response to one or more disease-modifying, anti-rheumatic drugs.

Perseid, a majority owned subsidiary of Maxygen, is focused on the discovery, research and development of multiple protein pharmaceutical programs, including its CTLA4-Ig programme. Perseid began operations on September 18, 2009 in connection with the consummation of a joint venture transaction between Maxygen and Astellas. Under the joint venture arrangement, Maxygen contributed $10 million of cash and substantially all of its programmes and technology assets in protein pharmaceuticals (excluding its MAXY-G34 programme) to Perseid in exchange for an 83.3% ownership interest in Perseid.

Astellas also invested $10 million of cash in Perseid and holds the remaining 16.7% ownership interest. Astellas also has been granted an option to acquire all of Maxygen’s ownership interest in Perseid at specified exercise prices that increase each quarter from $76 million (through March 18, 2011) to $123 million over the term of the buy-out option, which expires on September 18, 2012.

Maxygen is a biopharmaceutical company focused on developing improved versions of protein drugs through both internal development and external collaborations and other arrangements.