By Matthew Willett

Staff Writer

NeoTherapeutics Inc. subsidiary NeoGene Technologies entered an agreement focused on its milieu, G protein-coupled receptors, with Pfizer Inc.

The deal with New York-based Pfizer includes an initial payment for NeoGene and milestone payments on potential products. The deal focuses on NeoGene's research into G protein-coupled receptors (GPCRs), whose function is unknown.

Pfizer will partner with NeoGene on one orphan GPCR, but the companies would not divulge any more specific information on the nature of the research or the terms of the alliance.

NeoTherapeutics' president and CEO, Raj Shortriya, said the deal is a validation, of Irvine, Calif.-based NeoGene's technology. He said the deal is a first, but there's more to come.

"It's a validation of what we've been trying to do over the last several quarters," Shortriya said. "NeoGene was formed in 1999, and we were able to do a funding last year, and that established an outside valuation for the company, but we didn't have a validation of the value of the technology and products coming out of NeoGene until this deal. From that standpoint criteria, having that deal with Pfizer is all the better for us."

NeoGene's research has so far identified five orphan receptors, and partnerships for other receptors could be forthcoming, according to John McManus, NeoTherapeutics' director of investor relations.

"We have the ability to license out the other receptors we've identified as well as ones we identify in the future, and the capacity to do research for other pharmaceutical companies in this area," McManus told BioWorld Today. "They can basically acquire some of our capacity. There are a lot of things we're looking at and talking about to generate revenue from NeoGene."

NeoTherapeutics' stock (NASDAQ:NEOT) rose $1.313 Monday, or 34 percent, to close at $5.188. n