By Frances Bishopp

Staff Writer

In its 10th biotechnology collaboration and 15th corporate agreement, ArQule Inc., a combinatorial chemistry company, will partner with Genzyme General Corp. on the identification, optimization and development of drug candidates for the treatment of cancer, infectious diseases and autoimmune/inflammatory diseases.

The agreement, for which financial terms were not disclosed, calls for ArQule, of Medford, Mass., to provide Genzyme, of Cambridge, Mass., with access to ArQule's Mapping Array program for the identification of new lead compounds against Genzyme's biological targets.

Under terms of the agreement, Genzyme will employ its proprietary assays to identify drug leads from ArQule's Mapping Array compound sets. Once active leads are identified, ArQule and Genzyme will optimize them through ArQule's Directed Array program.

This process will continue through the demonstration of efficacy in a whole animal model. Following demonstration of whole animal efficacy, Genzyme will elect whether to continue preclinical development with payment to ArQule of milestones and royalties upon successful clinical and commercial development.

ArQule provides its partners with two types of synthesized compounds: Mapping Array compound sets, which include diverse, small molecule compounds used for screening against biological targets and Directed Array compound sets, which are arrays of analogs of a particular lead compound synthesized for the purpose of optimizing that lead compound.

Using its automated molecular assembly plant system and structure-activity relationship (SAR) data regarding biological targets and modular molecular components, ArQule produces quantities of pure small organic compounds in logically structured spatially addressable arrays.

Unlike traditional synthetic chemistry and current combinatorial chemistry approaches to drug discovery, ArQule's arrays are created by using structure-guided and rational drug design tools to select and assemble molecular building blocks with properties likely to exhibit biological activity.

ArQule's compound arrays are designed around certain core structures or themes. Each compound in the array is different from the adjacent compounds as a result of a single structural modification.

Each ArQule array omits compounds closely analogous to other compounds in the array, using representative diversity to create a logical representation of a virtual library of hundreds of times as many compounds as are in the array.

Drug developers are able to realize significant savings by screening the thousands of compounds in each ArQule array, rather than the millions of compounds it represents.

Eric Gordon, president and CEO of ArQule, explained that Mapping Array is the starting point of generating a field of activity from which conclusions are drawn on how to go forward into lead optimization.

"What we do is very different from other people in this segment of drug discovery are doing," Gordon said. "We don't get one point of data, we get a huge field of data which we are then able to compare with all of our experience within those families of targets, so we can immediately walk to lead optimization, using Mapping Array as a navigational tool."

ArQule raised $34.5 million in its initial public offering in October 1996 and just over $20 million in a secondary offering in earlier this month. ArQule, as of April 30, 1997, has $57 million in cash on hand.

ArQule's stock (NASDAQ:ARQL) closed Wednesday at $14.125, up $0.625. *