National Editor

Two years after Syrrx Inc. entered a deal to determine protein structures for Hoffmann-La Roche Inc., the companies are building on their arrangement to form a strategic partnership for cancer and diabetes treatments that could mean up to $178 million for Syrrx.

Keith Wilson, vice president of business development and structural chemistry for San Diego-based Syrrx, said the deal allows for "full-bore drug discovery" by his firm, and potentially even clinical development.

"There's a good possibility of that," he said. "Syrrx has been evolving a lot over the past two years." Clinical work is about to begin on the fruits of a diabetes deal entered in late 2003 with PPD Inc., of Wilmington, N.C., he noted. PPD bought $25 million worth of Syrrx's convertible preferred stock and is funding most of the preclinical and clinical studies through Phase IIb. The new agreement with Nutley, N.J.-based Roche (which is the U.S. prescription drug unit of the Roche Group, of Basel, Switzerland) concerns preclinical programs focused on two emerging targets - histone deacetylase (HDAC), an oncology target that regulates gene transcription, and 11-beta hydroxysteroid dehydrogenase-1 (11-beta HSD-1), a metabolic target that reduces the production of cortisol, which is overexpressed in diabetics.

Roche already had internal programs in the two areas, and Syrrx has established proprietary positions on structures and inhibitors of HSD-1 and HDAC. Syrrx's first deal with Roche involved finding protein structures in multiple therapeutic areas. Neither financial terms nor targeted indications were disclosed. (See BioWorld Today, May 3, 2002.)

"This is really a separate relationship relative to that," Wilson said.

Under the terms of the new pact, Syrrx will be responsible for advancing drug candidates through research and early development, and potentially as far as clinical proof of concept. Roche retains an option to license the worldwide rights and move the drugs further down the line.

Syrrx gets an up-front payment consisting of cash and equity, and maintenance and option payments, which could total $178 million if all product milestones are achieved, along with royalties, but Wilson said he couldn't provide a specific breakdown of the financial structure.

"Both of the targets are quite hot in the pharmaceutical industry," he said.

So it would seem. Whitehouse Station, N.J.-based Merck & Co. Inc. liked the HDAC target enough to buy out Aton Pharma Inc., of Tarrytown, N.Y., which had a lead candidate, suberoylanilide hydroxamic acid, or SAHA, which is in Phase II trials, and another cancer compound, pyroxamide, in Phase I work. Both products are HDAC inhibitors. Novartis AG, of Basel, Switzerland, and Berlin-based Schering AG also are working on products in that class. (See BioWorld Today, Feb. 25, 2004.)

The other target, 11-beta HSD-1, was at the center of a deal between Amgen Inc., of Thousand Oaks, Calif., and Stockholm, Sweden-based Biovitrum AB last fall. Amgen paid Biovitrum $86.5 million up front. If the Phase II lead product for Type II diabetes, BVT.3489, is approved, Biovitrum would get $435 million in milestone payments. (See BioWorld Today, Sept. 9, 2003.)

With those other efforts significantly further along in development, where does Syrrx and its deal with Roche fit?

"Syrrx has these targets solved," Wilson said. "We know what the atomic-level details are." That's been Syrrx's expertise - using high-throughput structural biology to determine the 3-dimensional structures of known drug targets.

The pair of programs involved in the Roche agreement are "pretty much neck and neck" preclinically, and will be run in parallel by Syrrx and Roche as a way to maximize value, Wilson said.

"It's a three-year deal, and then it can be extended by mutual agreement," he added.