West Coast Editor

Having closely collaborated with NeoGenesis Pharmaceuticals Inc. since 1999, Schering-Plough Corp. decided to make the relationship more like a marriage by acquiring most of the firm's assets for an undisclosed sum.

"It's a natural progression when things go that well," said Henry Skinner, president and CEO of Cambridge, Mass.-based NeoGenesis, calling the Schering-Plough relationship "our longest-standing" continuous partner. Another appealing aspect was "the human capital, which in our case is very high," he said.

The deal, subject to the usual conditions, is expected to close later this quarter, and Rosemarie Yancosek, director of global communications for Madison, N.J.-based Schering-Plough, said more details would be provided then.

Meanwhile, Schering-Plough is "making offers to the majority" of privately held NeoGenesis' 80 employees, and the firm will remain in Cambridge, Mass., after the buyout, Yancosek told BioWorld Today.

"It's important for us to have a presence in the Boston-Cambridge area due to the caliber of scientists there," she said.

Dealmaker NeoGenesis boasted last spring that its Automated Ligand Identification System (ALIS) platform and NeoMorph compound libraries had pushed it beyond a tools/platform company and into drug development. In March, the firm entered an agreement with London-based AstraZeneca plc to discover small molecules across various target areas. (See BioWorld Today, March 24, 2004.)

In 2002, a multiyear collaboration with Peapack, N.J.-based Pharmacia Corp. (now part of Pfizer Inc., of New York) was established to discover and develop drugs that target undisclosed disorders. Another partnership was formed, this one with Aventis Pharma AG, of Frankfurt, Germany, for infectious diseases. (See BioWorld Today, Feb. 15, 2002, and Aug. 1, 2002.)

The ALIS workstations can screen 12 proteins per year against the company's library of small molecules at a clip of about 300,000 compounds per day, identifying drug candidates without needing to know protein function first, as well as finding small molecules that bind to both soluble and membrane proteins. The library is made up of more than 10 million molecules formulated in mixtures.

Others who've tapped privately held NeoGenesis since its inception in 1997 include Schering-Plough Corp., of Madison, N.J.; Merck & Co. Inc., of Whitehouse Station, N.J.; Tularik Inc., of South San Francisco; Biogen Idec Inc., also of Cambridge; Celltech Group plc, of Slough, UK; Oxford GlycoSciences plc (bought by Celltech), of Oxford, UK; and Immusol Inc., of San Diego.

"We've had a great deal of success with the platform model and we're proud of that," Skinner said, noting that "it's been a little while" since pharma used a buyout to acquire previously rented technology.

"I wouldn't be surprised if this is the beginning of a new wave," he told BioWorld Today.

In 2001, Schering-Plough agreed to a potential $25 million broadening of their deal for antivirals, giving NeoGenesis a $5 million equity investment plus research and development funding of about $4 million per year for up to five years. (See BioWorld Today, Aug. 7, 2001.)

At the time, NeoGenesis expressed confidence that the deal would be renewed after five years.

"We didn't get to the point where they had to make that decision, obviously," Skinner said.

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