Novartis has been granted an option to acquire the US biopharmaceutical firm Proteon Therapeutics, which specialises in kidney and cardiovascular disease, for $550 million.

Any deal is dependent on the successful completion of a Phase II clinical study of PRT-201, in patients with end-stage renal disease undergoing surgery for arteriovenous fistula creation. The drug has been shown to cause dilation of segments of arteries and veins in animals and trials have been initiated in humans.

Proteon, a privately-held company based in Waltham, Massachusetts with research facilities in Kansas City, noted that it has also raised $38 million in a financing led by MPM Capital. Those funds, coupled with an undisclosed payment from Novartis, will allow the firm to develop PRT-201 through Phase II.

Proteon chief executive Timothy Noyes said that “patients with kidney failure endure great suffering and frequent hospitalisation due to vascular access complications. If successful, PRT-201 may improve medical outcomes and lower the associated cost of care”. Data from a Phase I/II trial for are expected in mid-2010.

The news comes days after Novartis signed an R&D collaboration with the Manchester, UK-based stem cell specialist Epistem.

Under the terms of the agreement, Novartis will pay Epistem an upfront cash payment of $4 million and provide research funding for two years. The Swiss major has an option to license targets for biotherapeutic products and for each one developed, Epistem is eligible to receive up to $45 million in milestones, plus royalties if leads are commercialised.

Matthew Walls, Epistem’s chief executive, said the collaboration “will enable us to accelerate the development of our existing targets with a world-class pharmaceutical collaborator and to jointly explore disease opportunities in regenerative medicine”.