GlaxoSmithKline (LONDON, UK) and Tolerx, Inc (CAMBRIDGE, Massachusetts) announced a worldwide alliance to develop and commercialize otelixizumab (TRX4), a novel humanized anti-CD3 monoclonal antibody that has potential across a broad range of T-cell mediated autoimmune and inflammatory diseases including psoriasis and rheumatoid arthritis (RA). TRX4 has been evaluated in type 1 diabetes (T1DM) in two phase II studies and in psoriasis in two phase I studies.
                 
Under the terms of the agreement, Tolerx will have responsibility for the phase III clinical program for type 1 diabetes in the US up to and including regulatory submission of the biologics license application. Tolerx has the option to copromote with GSK TRX4 in T1DM in the US, and GSK will have exclusive rights to develop and commercialize the compound in all other indications in the rest of the world. GSK also has the exclusive right to develop the pediatric indication for T1DM in the US. Tolerx expects to be first-to-market with a humanized anti-CD3 monoclonal antibody in T1DM and will receive an upfront payment in addition to equity and advance research and development funding totaling $70 million. Furthermore, Tolerx may receive up to $155 million in future development costs of TRX4 in T1DM, and has the potential to earn up to $350 million in milestone payments, assuming successful development and approvals of the compound for T1DM and multiple additional indications. Tolerx may also receive up to $175 million in sales milestone payments based on tiered net sales thresholds of TRX4. At the time of an IPO of Tolerx's common stock, GSK will invest up to an additional $10 million at the request of Tolerx, including certain other conditions.

Tolerx completed a phase Ia clinical trial of TRX4 in subjects with moderate-to-severe psoriasis in which the safety and pharmacokinetic (PK) profiles of TRX4 after escalating single intravenous infusions were established. No unpredictable adverse events were observed, and maximally tolerated doses were defined by cytokine release symptoms. Although the trial was not designed to assess efficacy, preliminary results demonstrated clinically meaningful improvements in several subjects' skin as measured by psoriasis area and severity index scores after just single doses of TRX4. Tolerx recently completed a phase Ib clinical trial of TRX4 in subjects with moderate-to-severe psoriasis in which the safety and PK profiles of TRX4 after multiple intravenous infusions were assessed. Tolerx expects to initiate a phase I clinical study of TRX4 in RA later in 2007.

TRX4 targets CD3 is a receptor component found on T-cells involved in normal T-cell signaling. TRX4 is designed to block the function of autoreactive T-effector cells while inducing T-regulatory cells (Tregs) that are thought to protect against T-effector cell damage well after the drug has been eliminated from the body. In a phase II study of subjects with new-onset T1DM, the compound demonstrated the potential to preserve function of insulin-producing beta cells in the pancreas and reduce the amount of administered insulin needed to control blood glucose levels for up to 18 months after only a single 6-day course of therapy. Treatment with TRX4 was associated with transient symptoms of flu-like syndrome and transient Epstein-Barr virus reactivation. Tolerx has completed dose optimization studies in subjects with T1DM and psoriasis and has identified a dosing regimen that has significantly reduced or eliminated these side effects while maintaining key biological activity.

Tolerx, in collaboration with Genentech, has a humanized anti-CD4 antibody (TRX1) in clinical development for the treatment of autoimmune diseases including cutaneous lupus erythematosus (CLE), systemic lupus erythematosus, and multiple sclerosis. Tolerx has completed a phase 1a single dose safety study in healthy volunteers, and a phase Ib multiple escalating dose trial in subjects with refractory CLE. In preclinical studies, TRX1 therapy has been shown to induce long-term, antigen-specific tolerance without compromising normal immune function. The CD4 receptor is found on both T-effector cells and Tregs.