Kicking off what looks to be an exciting year for FivePrime Therapeutics Inc., the San Francisco-based firm signed a deal with Centocor Research and Development Inc. to discover protein drugs for osteoarthritis and pulmonary fibrosis.

Using its discovery platform, FivePrime will screen its protein library against cell-based assays directed to those indications. In exchange, the company will receive an up-front payment of $15 million, which includes cash, as well as an equity investment by Johnson and Johnson Development Corp. FivePrime also is entitled to two years of research funding from Centocor, a unit of New Brunswick, N.J.-based J & J.

Centocor would have exclusive worldwide rights to develop and commercialize any proteins and targets identified during the collaboration, and FivePrime would receive undisclosed milestones and royalties. Specific terms were not disclosed.

"It's a very nice deal for us," said FivePrime President and CEO Gail Maderis, who called it "a step up from the [Boehringer Ingelheim] deal we originated last April."

The collaboration with Ingelheim, Germany-based BI, which could be worth as much as $75 million, marked FivePrime's first major partnership. Under the terms of that two-year research and license agreement, FivePrime will use its platform to identify protein therapies against rheumatoid arthritis. (See BioWorld Today, April 27, 2006.)

Revenues from those deals will "really allow us to extend our cash runway," Maderis said. The company's last financing was a $45 million private equity round in January 2005, and "we don't anticipate doing another financing until 2008."

FivePrime sees additional partnership opportunities on the horizon, though Maderis said the company's strategy is shifting from indication-specific deals, like those with Centocor and BI, to broader collaborations that will take advantage of the "high resurgence of interest in protein therapeutics" from pharma firms looking to bolster their thinning pipelines.

FivePrime's discovery technology involves the rapid screening of secreted proteins and membrane proteins in high-throughput cell-based assays to discover potential therapeutics in multiple disease areas. In addition to shortening the discovery time, the platform also provides hints of specificity and side effect profiles by giving "new insights into the extracellular proteins that regulate disease processes," said Rusty Williams, the company's founder and executive chairman.

In the Centocor deal, FivePrime will use its platform to discover targets and potential therapeutics against osteoarthritis, with a focus on the repair and regeneration of cartilage. Researchers set up cell-based assays to screen proteins to determine whether they can stimulate those processes.

"We really let the biology do the work," Maderis said. After designing assays that "really reflect the human disease conditions, we then let the cell tell us what the best protein is to do the job."

Its discovery engine also has contributed to FivePrime's internal pipeline, and the company expects to enter the clinic this year with its first product, FPT039, an Fc fusion protein in oncology. Beyond that, the company has FPT038, a preclinical protein for diabetes, followed by early-stage programs in coronary disease, inflammatory bowel disease and oncology.

"We're churning out a tremendous number of proteins," Maderis told BioWorld Today, and "we've picked up a lot of momentum for our programs going into this year."

FivePrime's resources are divided on a 50-50 basis between research and development work.