Chemistry-focused drug discovery and development company Scynexis Inc. could receive up to $150 million in research funding in a potential 15-year deal with animal health company Merial Ltd.

It is the first partnership for Scynexis involving the development of animal products, though the Research Triangle Park, N.C.-based company has entered a number of service and collaboration deals since its formation in July 2000. In addition to the $150 million - which includes an up-front payment - Scynexis also could receive milestone and royalty payments from products.

There was "a combination of factors that made this deal happen," said Yves Ribeill, president and CEO of Scynexis, who started the company after he and about 20 others left Paris-based Aventis. He added that some of those former Aventis employees had been doing animal research, and that expertise is part of what attracted Merial.

Scynexis has been "building a team that not only has chemistry expertise, but also has the GMP manufacturing and other tools" that can be used in the animal health field, he said. "It was obviously a good match with what Merial was trying to accomplish."

The collaboration has "customary provisions" for renewal or conclusion at undisclosed points along the timeline, but Scynexis is expecting it to last the full 15 years. The deal involves the establishment of a research and development team. Scynexis' role will be to provide "the complete package," Ribeill told BioWorld Today, including identifying targets, providing screening capabilities and optimizing drug candidates. That includes the use of the company's technologies, such as Medchem-Factory, which provides high-throughput synthesis and purification, and HEOS (Hit Explorer Operating System), a Web-based chemical information management software.

Based in Duluth, Ga., Merial is a joint venture between Whitehouse Station, N.J.-based Merck & Co. Inc. and Sanofi-Aventis Group that develops products to treat a range of animals, including pets.

"A lot of the illnesses that exist in animals are the same ones that you find in humans," Ribeill said. "As the populations grow older, they have cardiovascular problems, arthritis and diabetes."

In other areas, the goal is to find therapies for health issues specifically targeting animals, such as parasites, and certain infections.

Merial's product portfolio is very broad, said Scott Huber, director of the animal health project at Scynexis. "It looks at cardiovascular, anti-inflammatory, gastrointestinal and anti-infectives. We'll be looking at targets primarily for their safety and efficacy."

A portion of the funds from the Merial deal will be used to put together a team to support research work in animal health. Money also will go toward advancing the company's other ongoing collaborations.

Scynexis raised $29 million in a 2002 private investment round, and has raised more than $40 million altogether. But recently, the majority of its funding has come from its collaborations. The company, which has no plan to develop an internal therapeutic pipeline instead, is "building a pipeline of partnerships," Ribeill said. "We want to remain a highly expert service business."

One of these partnerships stems from a 2002 deal with Merck, in which Scynexis uses its technology to identify anti-infective drugs against Merck's targets. For any products resulting from the deal, Merck would hold exclusive worldwide rights, and Scynexis would receive milestone and royalties payments.

Scynexis also has a deal with F. Hoffmann-La Roche Ltd., of Basel, Switzerland, to discover and develop compounds for central nervous system and metabolic diseases. Terms call for Scynexis to provide access to its technology, in exchange for technology access fees and other compensation. (See BioWorld Today, Nov. 15, 2002.)

Most of the collaboration products are in preclinical development, but as they move into human trials, Scynexis said it might consider raising additional funds to pay for its share of the development costs.

As the number of collaborations and fee-for-service chemistry deals have grown, so has the company's capabilities. By the end of the year, Ribeill expects Scynexis to have about 100,000 square feet of lab space, and a total of 110 employees.

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