Procter & Gamble Pharmaceuticals, Inc., a division of the Procter & Gamble Company and ARYx Therapeutics, a private drug discovery and development company, announced a strategic alliance under which P&G will develop and commercialize ARYx's novel drug, ATI-7505, for the treatment of gastrointestinal disorders such as gastroesophageal reflux disease (GERD) and gastroparesis (delayed emptying of the stomach).

GERD affects approximately four to seven per cent of the global population, or approximately 250 to 450 million people worldwide. It can manifest itself as symptoms such as heartburn and regurgitation. More than 50 per cent of all diabetics suffer from gastroparesis, or more than 85 million people worldwide. Gastroparesis can lead to severe symptoms such as pain, nausea and vomiting, and even malnutrition.

ATI-7505 is an oral, serotonin type 4 (5HT4) agonist that is in phase 2 development. ATI-7505 has been shown to have prokinetic properties (increases upper GI motility, which is believed to play a beneficial role in GI symptom reduction). Based on its mechanism of action, initial studies show that ATI- 7505 prevents the regurgitation of stomach contents into the esophagus and accelerates the emptying of the stomach. This action may help relieve the symptoms of conditions where motility of the gastrointestinal tract is a problem. A prior 5HT4 agonist, Propulsid (cisapride), achieved nearly $1 billion in global sales, but was withdrawn from the market in 2000 due to side effects. ATI-7505 was designed using ARYx technology to retain the identical mechanism of action, while eliminating the safety issues. Clinical trial results to date support this target product profile, but larger studies are required to confirm the drug's efficacy and safety.

Under terms of the agreement, which remains subject to clearance under the Hart-Scott-Rodino Improvements Act, ARYx will grant P&G rights to the worldwide development and commercialization of ATI-7505 in exchange for a $25 million upfront fee, milestone payments, and royalties on product sales. In addition, ARYx has an option to co-develop and co-promote ATI-7505. In total, payments could reach $435 million over the life of the project, including $250 million that could be earned prior to commercialization. These payments are contingent upon the successful completion of specified development, regulatory, and commercialization goals. ARYx will receive royalties, with the rate escalating upon the achievement of varying sales targets. No other financial terms of the agreement were disclosed.

"We're impressed with ARYx's scientific innovation in its novel approach to make proven therapeutic mechanisms safer by engineering out specific metabolic and other problems that can cause significant side effects," said Mark Collar, President, Global Pharmaceuticals & Personal Health, Procter & Gamble. "The proven capabilities of Procter & Gamble Pharmaceuticals in prescription healthcare, combined with many years of deep GI consumer understanding developed through our successes with Asacol, Prilosec OTC, Pepto-Bismol and Metamucil will, if the drug is approved, allow us to provide physicians around the world a better treatment option for millions of people suffering from GI motility disorders."

"P&G's profound understanding of consumer behaviour, coupled with its proven product development skills for prescription pharmaceuticals, makes them an ideal partner for the continued clinical development and commercialization of ATI-7505," said Dr. Paul Goddard, chairman and chief executive officer of ARYx Therapeutics. "P&G's experienced sales force, and close relationships with gastroenterologists and general practitioners, also makes this collaboration an excellent strategic fit for ARYx. We are gratified that P&G shares our passion for improving the safety of drug therapy which has been the major focus of ARYx since it was founded."

GERD and gastroparesis are common gastrointestinal diseases that, if untreated, can cause extreme discomfort and medical complications. It is estimated that 25-40 percent of adults experience heartburn or related symptoms associated with GERD each year, resulting in four to five percent of all primary care physician visits.

Gastroparesis is a disorder of the stomach in which contents from the stomach do not move efficiently into the intestine. The digestive system, including the stomach, uses muscular contractions to move its contents along. Gastroparesis results when there is some damage or malfunction to this process in the stomach, resulting in symptoms ranging from nausea to severe abdominal pain and consequences such as bacterial infections and weight loss. Diabetics are particularly susceptible to gastroparesis, which is estimated to affect over 50 percent of this patient population.