BioWorld Today Correspondent

LONDON - Chroma Therapeutics Ltd. landed a deal boasting a headline value of $1 billion with GlaxoSmithKline (GSK) plc, in which Chroma will apply its chemical motif technology for targeting small molecules directly into macrophages, to develop treatments for autoimmune and other inflammatory diseases.

At the same time, Oxford, UK-based Chroma completed a fourth private funding, raising £15 million (US$24.5 million), in a round that included an equity investment from GSK, alongside the existing investors.

Chroma CEO Ian Nicholson told BioWorld Today the GSK collaboration involves four programs currently at the discovery stage. To reach $1 billion, each will have to get to market and reach specified levels of sales.

"The deal is structured around a significant payment up front in cash and a separate equity investment in our series D financing," said Nicholson, adding, "We are very comfortable with the payments and the nature of the milestones."

The collaboration with GSK's Centre of Excellence for External Drug Discovery (CEEDD) will build on Chroma's Esterase Sensitive Motif technology, in which chemical motifs are attached to enhance the delivery of small-molecule drugs to specific intracellular targets. Once inside the cell, the link between the motif and the drug is broken by intracellular esterases, preventing the drug molecule from passing back through the cell membrane.

Chroma said that over time the drug accumulates within the cells, increasing efficacy and duration of action. It has developed motifs that only can be uncoupled from the drug entity in monocytes and macrophages, and it is that aspect of the technology on which the GSK deal rests.

The lead program of the four will target a histone deacetylase inhibitor into macrophages for the treatment of rheumatoid arthritis. Details of other indications or types of small molecules to be developed in the collaboration were not disclosed, but Nicholson said they all involve novel chemistry, both in terms of the motif and the drugs to be delivered.

Beyond its monetary value, the agreement will enable Chroma to validate the technology platform. "We think it has significance beyond inflammation; there is huge potential in other disease areas, and this is the start of the exploitation," Nicholson said.

At a distance, deals with GSK's CEEDD, and similar agreements by other companies that extend the footprint of a big pharma's discovery effort, look like a glorified form of outsourcing, in which the resources of small biotechs are commandeered to service the big pharma pipeline.

However, Nicholson noted that Chroma has significant assets that are not encumbered, and said the deal is structured in such a way that "all our investors are supportive."

For each of the four GSK programs, Chroma is responsible for all research up to clinical proof of concept. If it decides to take up its options at that point, GSK will then take on all further development and commercialization work.

While Chroma will be taking on new staff to work on the GSK collaboration, the £15 million of new equity allows it to advance three in-house clinical programs, which to date are unpartnered.

In particular, a Phase III registration trial of Chroma's lead product, tosedostat (CHR-2797) in treating myelodysplastic syndrome, now can go ahead. The product inhibits aminopeptidases, a family of intracellular enzymes involved in generating amino acids that are essential for cell growth.

The £15 million is half the amount Chroma raised in its previous funding round in 2006. "In terms of the funding climate it is the worst ever," Nicholson said, "but it [£15 million] was fully what we set out to achieve."