Collateral Therapeutics and Schering AG in Germany are developing a gene therapy product, GENERX for coronary artery disease. Based on the terms of the agreement, Schering or its affliates will be responsible for conducting and financing phase II/III clinical trials which are currently underway in the US and Europe. In particular, Berlex Labs (the US subsidiary of Schering AG), is involved in developing the gene therapy in the US. GENERX is an angiogenic gene therapy which triggers the production of a protein that stimulates new blood vessel growth providing an alternative route for blood to bypass clogged and blocked arteries in the heart. GENERX involves a one-time, non-surgical delivery of an adenovirus vector containing the human fibroblast growth factor-4 (FGF-4) into coronary arteries via a standard catheter. The FGF-4 gene was licensed from New York University. Collateral Therapeutics has been granted a US patent for "gene transfer-mediated angiogenesis therapy" for the nonsurgical administration of angiogenic genes for coronary and peripheral vascular disease. The patented technology has been licensed from the University of California. Collateral and Berlex have initiated pivotal phase IIb/III trials with GENERX in the US and Europe. The US-based study will evaluate the safety and efficacy of GENERX in patients with stable exertional angina due to coronary artery disease. The European-based study will evaluate patients with advanced coronary artery disease who are not considered candidates for interventions such as angioplasty and bypass surgery and/or patients who are unlikely to have positive outcomes from such interventions. Both studies, of a multicentre, randomised, double-blind and placebo-controlled design, will evaluate 2 dose levels of GENERX which will be non-surgically administered to the heart via intracoronary infusion through a standard cardiac catheter. Collateral also plans to develop a non-surgical gene therapy product using the FGF-4 gene for the treatment of patients with heart failure. In a blinded placebo-controlled study in a pig model of pacing-induced heart failure, intracoronary delivery of human FGF-4 expressed in an adenovirus vector showed significant improvement in regional cardiac function and a reduction in the size of the heart over a 3-week study period. If these results translated favourably to humans, FGF-4 gene therapy may be a therapeutic option for patients with dilated heart failure. Collateral Therapeutics has also announced a research collaboration with Targeted Genetics on the use of viral vectors to deliver therapeutic genes in cardiovascular disease. Under the terms of the agreement, Targeted Genetics and Collateral Therapeutics each have the option to collaborate further to use Targeted Genetics' recombinant adeno-associated viral vector to treat congestive heart failure. In such an event, Targeted Genetics would be responsible for constructing and manufacturing the vector, and Collateral Therapeutics will fund the costs of future collaboration. Either party may terminate this agreement at any time upon 30 days prior written notice.