BioWorld International Correspondent

PARIS - Ariana Pharmaceuticals signed three agreements with the Pasteur Institute that tie the company's future to the Paris-based medical research foundation.

Through the deal, the Pasteur Institute acquired a shareholding in Ariana, the size of which was not disclosed but constitutes a minority stake, said Ariana CEO Mohammad Afshar.

For another, Ariana has moved out of its original Paris premises into the Pasteur Institute's biotechnology incubator, known as BioTop.

Finally, under a fee-for-services contract, Ariana is to provide drug discovery services for the evaluation and validation of drug candidates identified by the Pasteur Institute in two therapeutic areas - oncology and anti-infectives.

Ariana Pharmaceuticals was founded in 2003 to exploit computer technology for drug discovery purposes. It licensed the technology from France's National Scientific Research Centre (CNRS) and has used it to create a virtual screening platform that can screen a library of more than 2 million existing drug-like molecules against the 3-dimensional structure of a protein target or entire families of related proteins.

At the same time, it developed a drug development support technology called KEM (Knowledge Extraction and Management), which it started to make available to third parties at the end of 2004. KEM is a computational tool that integrates and mines multiple data sources. It incorporates computational algorithms that are applicable to the major classes of proteins, and Ariana uses the technology to identify potentially effective molecules that are amenable to modification by medicinal chemistry and which meet ADMET criteria.

Combining selective, high-throughput virtual screening methods with other proprietary computational, crystallographic and biochemical methods - what Ariana calls in silico ADMET - improves the likelihood of identifying small-molecule drug hits against validated protein targets, the company said.

Afshar told BioWorld International that it was Ariana's "multi-parametric data analysis capability that has enabled us to grow" and that it had concluded service agreements with a number of major pharmaceutical companies, including GlaxoSmithKline plc, of London; Pfizer Inc., of New York; and leading Swiss and French companies.

The company's fee-for-service activities have generated sufficient cash to fuel its development up to now and it hasn't needed to raise external funding. When Ariana was founded, it had sought funding of up to 5 million (US$5.9 million) from venture capitalists to finance its early stage research and development, but its lead investor backed out and the financing was never completed.

Instead, said Afshar, "the company changed its business model and succeeded in earning revenues more quickly than originally planned" by providing virtual screening, assays and real screening services. And its revenues have been further boosted since it commercialized KEM.

Now, the "funding from Pasteur and the service contracts we have with them have secured our future," said Afshar. In addition, he said, Ariana hoped to benefit from synergies with other start-ups in the BioTop incubator.

The company is expected to expand its work force, probably in the second half of 2006, said Afshar At present, it employs six full-time staff, plus four on contract.