In a deal worth up to $68 million, Structural GenomiX agreed to use its FAST drug discovery technology with Serono SA to develop small-molecule therapeutics.

FAST (Fragments of Active Structures) will generate lead compounds for Serono's selected kinase and phosphatase targets for an undisclosed therapeutic area.

"This is a deal that involves FAST lead-generation activities - it's the first one of its kind," Tim Harris, Structural GenomiX's CEO, told BioWorld Today. "We have developed this proprietary technology for finding small molecules that bind to large molecules and are progressing them and optimizing them."

San Diego-based Structural GenomiX began work on its FAST technology about 18 months ago, building it as an extension to its structure-based drug discovery platform.

In the deal, Geneva-based Serono will cover development and commercialization expenses of any candidates that come out of the collaboration, gaining worldwide rights. Structural GenomiX will receive up to $68 million in up-front and research payments and clinical development milestones. The company also is entitled to royalties.

"The financial terms of the collaboration are very attractive," Harris said. "The milestones are based on key steps within the research programs, and the milestones will be paid as compounds proceed through clinical development."

It's partnerships like that that enable Structural GenomiX to focus its own resources on an internal oncology program. The private company, which was founded in 1999, has almost a dozen partnerships in which it uses its technology to help other companies generate lead compounds against their targets. About a year ago, the company agreed to use its gene-to-structure technology platform on certain Eli Lilly and Co. drug targets to determine their 3-dimensional structures. Terms of the deal with Indianapolis-based Lilly were not disclosed, but the deal was expected to pay for 70 percent of Structural GenomiX's expenses in 2003. (See BioWorld Today, April 22, 2003.)

Structural GenomiX and Lilly expanded their collaboration in January to provide Lilly with access to the SGX synchrotron beamline facility, SGX-CAT, to support Lilly's drug discovery programs.

"Obviously, the structural information that we provide," Harris said, "particularly information about how compounds that partners have bind to their respective targets, is extremely important for helping them to generate novel compounds to put in the clinic."

And Structural GenomiX gets paid for that information.

"We brought in something like over $18.5 million in cash last year," Harris said. "We're expecting to do more than that this year in 2004. Obviously, [the Serono deal] helps us to do that."

Nevertheless, Harris said the company, which has 140 employees, likely would conduct a financing sometime this year. It also hopes to move its first lead from its internal oncology program into the clinic as soon as possible. "We've identified some very interesting molecules," Harris said.

The company discovered the molecules using its new FAST technology, which identifies novel, potent and selective small-molecule inhibitors of drug targets within a six-month time frame. The process involves crystallographic screening of lead-like drug fragments. By determining the co-crystal structures, researchers can determine in atomic detail how small molecules interact with drug targets.

Using parallel chemical synthesis and computational tools, the fragments are elaborated to produce optimized leads with high-binding affinities and low-molecular weights.

The technology allows researchers to generate lead compounds quickly. Only a small number are synthesized and screened from a library of 160 million compounds.

Structural GenomiX has used the FAST technology to discover leads for several oncology targets in its internal program.

"It's all based on the ability to use X-ray crystallography in real time," Harris said.

Partners that work with Structural GenomiX often gain access to SGX-CAT, which is located at the Advanced Photon Source at the Department of Energy's Argonne National Laboratory in Chicago. The facility enables the collection of macromolecular X-ray diffraction data.