Prana settles clioquinol dispute

Melbourne dementia drug-hunter Prana Biotechnology Ltd (ASX:PBT, NASDAQ:PRAN) has resolved a long-running patent dispute with Greek pharma PN Gerolymatos (PNG) over the composition and uses of Prana’s former lead anti-Alzheimer’s drug, clioquinol, or PBT-1.

Prana and its US collaborator, Massachusetts General Hospital, have agreed with PNG to recognise each others’ rights to develop clioquinol in their respective territories.

Prana will hold the rights to clioquinol in the lucrative US and Japanese markets, while PNG will hold rights in Europe and other territories.

Prana said all patent oppositions in Europe and Australia would be withdrawn, and lawsuits pending before the US District Court of the District of Columbia, and the Court of Athens in Greece, would be dismissed.

As part of the settlement, Prana has allotted 1.35 million shares to PNG, to be held in escrow for 12 months. Prana will also pay PNG a royalty on clioquinol sales in the US and Japan, while PNG will reciprocate with a percentage of royalties from sales in its own territories.

In a statement, PNG president and CEO Panayotis Gerolymatos, said the company was pleased to put the litigation behind it. “The amicable settlement makes possible the further development of cluiquinol, and we look forward to working jointly with Prana in this regard,” he said.

Clioquinol is Prana’s former lead compound for AD. Prana used the long-discontinued anti-diarrhoea medication -- which has metal-chelating properties -- to obtain proof of concept for the now well-accepted hypothesis that copper and zinc ions play a key role in the aggregation of the amyloid plaques that clog the brains of patients with Alzheimer’s disease (AD).

Prana’s executive chairman, Geoffrey Kempler, said Prana now held issued patents in the US on clioquinol. In late 2003, the company’s Phase II clinical trial showed that clioquinol slowed the progression of the disease in patients with moderate to severe AD-caused dementia.

But since Prana and PNG began disputing patent rights to clioquinol, Prana has developed a new lead compound, PBT-2, which in pre-clinical tests appears to be an even more potent metal chelator than its prototype.

Diane Angus, Prana’s senior VP of business development and IP, said the patent agreement did not cover PBT-2, so Prana had exclusive rights to commercialise any successful drug around the world.

PBT-2 is currently undergoing toxicology testing, after being selected as the most promising of 300 different synthetic molecules, all variants on clioquinol’s basic molecular theme. The first clinical trial is planned for the first quarter of 2005.

“We’re not aware whether PNG is developing a second-generation compound, but we’re now working on new variants on the PBT-2 theme to see if we can improve its activity and specificity,” Angus said.

She said the original patent dispute over clioquinol had its origins in the collaborative research that led Prana co-founder Dr Ashley Bush to his hypothesis about the role of copper and zinc, and oxidative stress, in AD.