SRI International, an independent, nonprofit research and development organization, announced today a licensing and research agreement with AuricX Pharmaceuticals. Under the terms of the agreement, AuricX gained rights from SRI to oral formulations of the antibiotic vancomycin. SRI received upfront payments and will be eligible for success-based milestones and royalties on sales. Terms have not been disclosed.Once considered the “drug of last resort,” vancomycin is now commonly used in hospital settings for the treatment of systemic infections caused by antibiotic-resistant Gram-positive bacteria such as methicillin-resistant Staphylococcus aureus (MRSA) and Staphylococcus epidermidis (MRSE). These resistant bacteria are frequently the cause of hospital-acquired infections and are increasingly found in infections occurring in the community, posing a serious health problem to the general public. According to IMS Health, sales for antibiotics designed to treat serious infections caused by Gram-positive bacteria exceeded $1 billion in U.S. sales in 2007. Vancomycin sales were more than $380 million and accounted for 85 percent of the courses of therapy prescribed. “Improving the oral absorption of vancomycin has the potential to improve the quality of patient care and to reduce overall healthcare costs,” said Gita Shankar, Ph.D., Director of Formulations R&D at SRI and an inventor on the patent applications. “An oral form of vancomycin will allow patients to leave the hospital earlier and to continue their treatment at home, where they will not need to maintain an intravenous line.” Early proof-of-concept work at SRI to develop the orally bioavailable vancomycin formulation was funded by a contract from the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health. Under the research agreement with AuricX, SRI will complete its formulation studies and fully optimize the oral bioavailability of vancomycin. “We are pleased to be partnering with SRI on this innovative solution to address a known clinical need,” said Eric Nicolaides, CEO of AuricX and Managing Partner of Wildcat Venture Management, the venture firm which launched AuricX in 2006. “The addition of a breakthrough formulation for one of the world’s best known antibiotics is a welcome addition to AuricX’s pipeline. We look forward to working with SRI to complete this work and we are committed to getting this product into the clinic and to those in need as quickly as possible.” “This agreement demonstrates the breadth of SRI’s drug discovery and development programs,” said Edward Spack, Ph.D., senior director of business development, SRI Biosciences Division. “In addition to licensing our own proprietary drugs, we work with clients and partners to solve a wide range of formulation and delivery challenges, in the present case expanding the potential impact of a currently approved drug. We look forward to working with AuricX to develop a formulation that will permit the oral treatment of resistant Gram-positive infections in a more economical and practical manner.”