By Debbie Strickland

Staff Writer

What if a drug is highly effective for 10 percent of patients with a given disease, causes debilitating side effects for another 30 percent, and does nothing for the remaining 60 percent?

Paris-based Genset SA, which just inked an up-to-$42.5 million pharmacogenomics agreement with Abbott Laboratories, has developed a system that could identify that hypothetical golden 10 percent.

"Through our pharmacogenomics approach, we will pinpoint the multiple genes and polymorphisms associated with efficacy and side effects of drugs," said Pascal Brandys, Genset's chairman and CEO.

The deal with Abbott Laboratories, of Abbott Park, Ill., consists of an equity investment, along with a research and development collaboration centered on an undisclosed Abbott compound, which will serve as a test case for the process.

As part of the agreement, Genset and Abbott formed an alliance through which they will jointly negotiate and benefit from third-party collaborations, using Genset's system to target drugs to the disease population subsets most likely to benefit.

Abbott To Own 5 Percent Of Genset

Abbott will make its $20 million equity investment in two parts — $10 million up front and $10 million upon exercise of a put option by Genset during the year following the first anniversary of the initial investment, if the parties have met certain obligations. The equity purchase represents about 5 percent of the company, according to Brandys.

Abbott also will support development of the initial compound with up to $22.5 million in research and development funding and milestone payments over the course of the next 18 months. If successful, Genset also will receive royalties on sales of both the drug and related diagnostic assays. The arrangement could serve as a model when the alliance launches new collaborations.

Under the strategic alliance, Genset will develop a proprietary, high-density bi-allelic marker map of the human genome and will use its technology platform to identify for pharmaceutical companies markers and genes associated with response to the administration of specific drugs.

Abbott will develop, produce and market diagnostic systems derived from these genes and markers to test patient responses to drugs.

The companies plan to seek pharmaceutical partners "immediately." Alliance revenues from research fees, milestones and royalties on sales of drugs developed using pharmacogenomic analyses or prescribed using pharmacogenomic tests will be shared by the partners. Genset also will receive royalties on sales of pharmacogenomic diagnostics developed by Abbott.

"Pharmacogenomics will be a shortcut to generate revenues from genomics with direct use of existing clinical trials and with immediate application to existing drugs," said Brandys. "The objective of this alliance is to start as many programs as possible with pharmaceutical companies in the first year."

The pharmacogenomic method could be used throughout the life cycle of a drug, from development through clinical trials, regulatory approval and marketing, and could even be used to rescue drugs that have failed in clinical trials.

At the clinical trial level, the process offers the possibility of better trial results, since patients who would suffer side effects — or no effect — could be eliminated at the outset. For approved drugs, pharmacogenomics holds out the prospect of better labeling and more targeted marketing and prescribing.

The company's competitors in pharmacogenomics include Variagenics Inc., of Cambridge, Mass.; MitoKor Inc., of San Diego; and Genaissance Pharmaceuticals Inc., of New Haven, Conn.

"This is the first time a program addressing the complete human genome has been started in pharmacogenetics," stressed Brandys. Genset, with its patent-pending mapping technique, is "absolutely ready" for practical drug development, he added, and Abbott officials seem to agree.

"Pharmacogenomics would not be possible without Genset's high-density map of the human genome allowing the efficient study of the genetic makeup of unrelated individuals," said Andre Pernet, Abbott's vice president for pharmaceutical research and development.

"We view our alliance with Genset as the first practical opportunity to discover the complete genetic basis for drug response and to design therapies that fit individuals' needs better than ever before," he added. "The result is treatment that is optimally efficient and effective for each patient."

Although Genset's most lucrative collaboration to date is a $70.5 million agreement with Synthelabo to find and sequence genes related to prostate cancer, the Abbott deal could ultimately overtake it, due to the potential spin-off collaborations, said Brandys.

The company's shares (NASDAQ:GENXY and Nouveau Marche:Genset) closed Monday at $19.625, up $0.125, in the U.S. Genset, which has 278 employees, and wholly owned subsidiaries in La Jolla, Calif., and Tokyo, finished the first quarter of 1997 with $87.5 million in cash. *