Sequenom Inc. could gain up to $30 million after entering an osteoporosis drug development deal with Proctor & Gamble Co.

San Diego-based Sequenom granted an exclusive license to gene targets that it discovered play a role in the disease to P&G. P&G's pharmaceutical division will conduct preclinical experiments in biological and animal models to validate the targets in an effort to identify candidates to take further.

"Specifically in osteoporosis, they're one of a few companies with sophisticated bone and animal preclinical models to drive a target-level discovery into the clinic," Robin Jackman, Sequenom's vice president of corporate development, told BioWorld Today. "So, they're actually a great partner for osteoporosis. And our goal is to partner many of our programs and disease areas with the best partners."

Cincinnati-based P&G already sells a largely used osteoporosis product, Actonel, which generated $700 million in 2003 sales through a co-marketing agreement with Aventis SA, of Lyon, France.

Jackman declined to provide specifics about the targets associated with the deal, such as their effects on the disease process, but should any products rise from the agreement, Sequenom would receive sales royalties. Before that point, P&G will make license and milestone payments that could move the total to $30 million.

Sequenom retains all diagnostic rights to the targets.

Jackman noted that P&G's interest arose from Sequenom's discovery of new entry points into disease-modifying targets. Its genetic approach provides for discoveries of genes causative of a disease process, some of which can be used in drug development.

"Since you're casting a net, you're also getting genes that are druggable - kinases, GPCRs, or surface proteins," he said. "And you focus on genes that are druggable. You can put the other ones on a shelf until you know what to do with them, or if they have a strong diagnostic linkage, you can use them from a pharmacogenetics or diagnostics standpoint."

For Sequenom, the agreement signals a model for future such deals related to other disease targets it has discovered. The company has pursued targets in 11 diseases, including various cancers, cardiovascular disease, osteoarthritis, schizophrenia and obesity, as well as osteoporosis. Jackman said discussions are under way with potential partners around different diseases.

On its own, Sequenom has advanced an undisclosed internally generated target into the screening process, with plans to carry others forward as well.

"We're going to focus on areas more tractable to a company with our size and resources," Jackman said. "At the end of the day, we have far too many valuable targets that are genetically validated and replicated in independent populations to carry forward ourselves."

Through Sept. 30, the company reported $73.2 million in cash, cash equivalents, short-term investments and restricted cash. Sequenom recorded an $8.8 million net loss during the three-month period preceding that date.

Its stock (NASDAQ:SQNM) gained 14 cents Thursday to close at $3.25.

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