Staff Writer

Discovery Partners International Inc. expanded its two-year-old agreement with Pfizer Inc., anticipating the deal to generate another $46 million in revenues.

The companies began their work in December 2001 to develop and produce libraries of high-purity chemical compounds to be used in New York-based Pfizer's drug discovery programs. With the new agreement, Discovery Partners will provide a broader range of chemical compounds to support Pfizer's programs. The companies will collaborate for two more years, at which time Pfizer could extend the contract again.

As part of the agreement, Pfizer also gains access to Discovery Partner's ability to prepare and deliver hit follow-up libraries designed using the results of Pfizer's high-throughput screening. The compounds will assist in the lead-optimization phase of the drug discovery process. Basically, Pfizer will leverage Discovery Partners' infrastructure, synthetic and medicinal chemistry expertise, and high-throughput compound production and purification capabilities.

With the renewed contract, Discovery Partners expects between $43 million to $46 million in revenues from Pfizer over the next two years. About half of that will be seen this year. Specific financial terms of the expanded agreement were not disclosed.

During the past two years of the original contract, San Diego-based Discovery Partners received about $48 million in revenue from Pfizer.

In 2001, when the initial collaboration was announced, Discovery Partners said the collaboration would be worth about $95 million over four years, but it did not disclose specific financial terms at that time. (See BioWorld Today, Dec. 21, 2001.)

Discovery Partners' chairman and CEO Riccardo Pigliucci said in a prepared statement that the financial parameters remained as they were under the original agreement, but "the new arrangement diversifies the types of chemical compounds and products that we will supply to Pfizer, and these compounds will have application at various stages of the Pfizer drug discovery process."

Pigliucci was at a conference on Wednesday and could not be reached for comment.

Discovery Partners' stock (NASDAQ:DPII) closed Wednesday at $6.07, up 3 cents.