Cypress Bioscience Inc. is picking up a portfolio of personalized medicine laboratory services and early stage clinical candidates by acquiring specialty pharma firm Proprius Pharmaceuticals Inc.

The deal calls for Cypress to pay $37.5 million in cash - coming from the firm's existing cash balance, which totaled $182 million at the end of 2007 - plus an additional $37.5 million in potential milestone-based payments relating to further development of Proprius' therapeutic candidates in areas such as pain and rheumatoid arthritis.

While those early clinical compounds certainly are of interest, it's Proprius' near-term commercial opportunities that Cypress hopes will merge nicely with its upcoming commercial prospect, milnacipran, a dual-reuptake inhibitor under FDA review for fibromyalgia. Last week, the agency accepted the company's new drug application, and a 10-month review should mean a PDUFA date by the end of October.

Among those predictive technologies is an early rheumatoid assay designed to determine the likelihood of developing RA in patients with undifferentiated arthritis. Proprius also has a methotrexate (MTX) polyglutamates monitoring assay aimed at helping physicians optimize MTX therapy by providing information regarding a patient's ability to metabolize MTX.

Cypress intends to market the personalized medicine laboratory services using the same sales force it plans to build in anticipation of milnacipran's launch. That force will target rheumatologists and other pain specialists.

Partner Forest Laboratories Inc., of New York, will reimburse Cypress for the cost of milnacipran detailing effort to those doctors.

The Proprius acquisition "affords us a unique strategic opportunity," Jay D. Kranzler, Cypress chairman and CEO, said in a press release, "one that will leverage our future sales force while enhancing its access to these specialists."

The deal is expected to close in March, after which Proprius' employees and operations will be folded into Cypress' San Diego office. Proprius founder, President and CEO Michael Walsh will remain on board, becoming an executive vice president and chief commercial officer at Cypress.

Shares of Cypress (NASDAQ:CYPB) closed at $8.07 Monday, up 11 cents.

Privately held Proprius raised $17 million in its Series A round in January 2007, backed by investors Atlas Venture, Forward Ventures, CDIB BioScience Venture Management, Fog City Fund and Windamere Venture Partners. Among its clinical-stage products is Indaflex, a topical nonsteroidal anti-inflammatory drug for osteoporosis, in-licensed in 2006 from AlphaRx Inc.