Chiron Drops AeroGen, Teams Up With Inhale Therapeutic

Chiron Corp. said Tuesday that it will develop an inhaled treatment for cystic fibrosis with Inhale Therapeutic Systems Inc. and that it ended its collaboration on a similar product with AeroGen Inc.

Shares of San Carlos, Calif.-based Inhale Therapeutic climbed $2.12, or 13%, to $18.18. Sunnyvale, Calif.-based AeroGen, which makes products to control drug delivery to the lungs, dropped 88 cents, or 27%, to $2.34. Chiron rose $1.07 to $43.33. All three trade on Nasdaq.

Chiron and Inhale, a partner in other collaborations for lung infection therapies, will develop an inhaled treatment that uses the medicine tobramycin in a dry powder form to treat infection in patients with cystic fibrosis, an inherited disease that affects the respiratory and digestive systems. AeroGen had been working with Chiron to develop a treatment using a liquid formulation.

“You can get higher concentrations of a drug in a dry powder formulation than with a liquid, [though] my guess is Chiron did it because they already had a collaboration in place with Inhale on multiple anti-infectives,” said SG Cowen Securities analyst Ian Sanderson, who rates Inhale Therapeutic and AeroGen “buy” and doesn’t hold the companies’ shares.

AeroGen had been developing its inhaled treatment with Pathogenesis Corp. when Chiron bought Pathogenesis in September 2000.

Emeryville, Calif.-based Chiron didn’t disclose terms of either agreement, though it said Inhale Therapeutic will receive funding for research and development, payments as the collaboration reaches goals and royalties when the product reaches the market.

AeroGen Chief Executive Jane Shaw said she was very disappointed by Chiron’s decision.