Allelix and Astra announce osteoporosis agreement.

TORONTO--(BUSINESS WIRE)--June 18, 1996--Allelix Biopharmaceuticals Inc. (TSE/ME:AXB) Mississauga, Ontario and Astra AB of Sweden announced today that they have concluded a long-term agreement for the worldwide development and commercialization of ALX1-11, Allelix's lead experimental product -- PTH (recombinant human Parathyroid Hormone), for the treatment of osteoporosis.

Under the terms of the agreement, Allelix will receive up to C$50 million in initial licensing payments, clinical development milestone payments, and annual development support. Allelix will also receive royalties from commercial sales of PTH. In addition, Astra will be responsible for the development and commercialization of PTH, beginning with Phase III clinical trials. Clinical trial programs of similar scope can cost in the order of C$100 million. PTH is currently undergoing Phase II clinical trials in Canada and the United States.

The agreement with Astra further provides that, under certain conditions, Allelix may become the manufacturer and supplier of PTH for commercial sale. A decision on this is expected to be made by the end of 1997. To assure the supply of bulk PTH material sufficient for Phase III clinical trials and early commercial sales, Allelix and Chiron b.v. of Amsterdam have agreed to extend their ALX1-11 manufacturing collaboration.

"The Astra collaboration is another major partnership milestone for us," said Graham Strachan, president and CEO, Allelix. "This new partnership provides the expertise and resources to move the product forward aggressively. We are proud to have one of the fastest growing multi-national pharmaceutical companies in the world as our partner on this project."

A Tribute to Canadian Research Capability

"This agreement allows Astra to further develop some of the most advanced biotechnology research available internationally and assist in the development of a potential new treatment for the over 200 million people with osteoporosis worldwide," said Gerry McDole, president and CEO of Astra Pharma Inc., Astra AB's Canadian subsidiary. "PTH is the first in a new family of medications for osteoporosis, and is expected to build more bone in a shorter time frame than other products available today.

"This partnership is further evidence that the Patent Act is working for Canada," stated McDole. "There is no question that Canada's progressive regulatory environment encourages international investment."

Expanding Horizons

One of the largest deals in the history of Canada's biotechnical industry, the partnership is the latest in the series of research agreements that keep Allelix in the forefront of successful biotech companies. In addition to the Astra collaboration, Allelix has formed four strategic partnerships with major pharmaceutical companies over the last eight years. Partnerships with Hoechst Marion Roussel, Eli Lilly, Nordion International and Groupe Fournier are all contributing to Allelix's continued success in discovering important and novel pharmaceuticals.

Allelix has two other products in the development stage, including treatments for the Human Immunodeficiency Virus (HIV, the virus that causes AIDS) and cytomegalovirus (CMV), which often leads to severe infections in AIDS patients and others with weakened immune systems. It is also conducting research for drugs to treat schizophrenia, migraine, stroke, obesity and atherosclerosis.

Allelix Biopharmaceuticals Inc. is a Canadian biotechnology company that employs advanced research to discover and develop innovative pharmaceutical products. In collaboration with major pharmaceutical companies, it develops its products internationally. Allelix is a public company, with shares listed on the Toronto and Montreal Stock Exchanges under the symbol AXB.

Astra AB is one of the world's fastest growing international pharmaceutical companies. Employing approximately 17,000 persons in 40 countries, Astra research activities include respiratory, cardiovascular and gastrointestinal diseases as well as pain relief and disorders of the central nervous system.

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Betsy Aitkenhead

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