Novartis has decided to discontinue further development of DRF-4158 (LBL-752) molecule and will collaborate with Dr Reddy's for the development of an additional dual-acting insulin sensitiser compound. DRF-4158 is a Peroxisome Proliferator Activated Receptor (PPAR) alpha-gamma agonist or a dual-acting insulin sensitiser that was outlicensed to Novartis in May 2001. The decision comes almost six months after Novo Nordisk suspended clinical trials of DRF-2725 molecule outlicensed to it by Dr Reddy's.

According to a press release from Dr Reddy's on Thursday, under the terms of the agreement, Novartis has rights for an additional development compound that is a dual-acting insulin sensitiser. The terms and conditions of the original agreement remain unchanged.

Dr Reddy's was to receive $55 million in staggered payments from Novartis for DRF-4158. Of this, it received $5 million as upfront and milestone payments.

Dr Reddy's would now independently assess all data on DRF-4158. The company would carry out additional pre-clinical studies to determine the appropriate development path for the molecule.

Dr Uday Saxena, Chief Scientific Officer of Dr Reddy's, said, "We accept the decision taken by Novartis and both parties are currently in close discussion on a series of potential dual-acting insulin sensitiser candidates for development. Dr Reddy's is a world leader in the chemistry and pharmacology of dual-acting insulin sensitisers and is committed to developing new medicines that will address unmet medical needs in the areas of diabetes and metabolic disorders."

The statement did not mention the reasons for Novartis' decision to discontinue further development of DRF-4158. When contacted, a spokesman of Dr Reddy's said it was an internal decision of Novartis. It could be commercial, the profile of the molecule or the drugs in the pipeline. However, he said the molecule, from the trials so far carried out, was safe.

"LBL 752, an investigational compound for diabetes, has been returned to the licensor, Dr Reddy's Laboratories, whilst potential backup compounds continue to be evaluated as part of the collaboration," Novartis said in a statement. It did not give any further detail as to why it was returning the molecule. Novartis took the decision before launching clinical trials on the compound.

Novartis officials would be visiting Hyderabad to evaluate the other insulin sensitisers with Dr Reddy's. A decision would be taken in a couple of weeks about the new compound which Novartis would develop. Dr Reddy's has some undisclosed lead molecules with dual-acting insulin sensitiser properties, which might be considered by Novartis.

It may be recalled that in July last year Novo Nordisk had suspended phase III clinical trials on DRF-2728, also a new generation dual-acting PPAR alpha-gama agonist of Reddy's outsourced to the Danish company, the largest manufacturers of diabetes drugs, as long-term carcinogenecity studies had revealed urine bladder tumours in rats.