BioWorld International Correspondent

MUNICH, Germany - Graffinity AG, a specialist in preclinical drug discovery, landed a commitment from Serono SA to help fill the development pipeline of Europe's largest biotechnology company.

Serono, of Geneva, will provide Graffinity, of Heidelberg, with five target proteins related to treating major diseases in fields that range from immunology to reproductive health. The German company will use its proprietary techniques to identify and evolve small-molecule leads for the targets.

"This is a very nice package deal," Klaus Schollmeier, CEO of Graffinity, told BioWorld International. "Five targets make it a good size, with a terrific partner. I also think this is a good fit, as we are chemically driven, and they have been more protein oriented. The partnership plays to the strengths of both companies."

The deal also sends a signal in a difficult market, in which drug discovery companies had been losing favor among investors, compared with product companies. "Making a deal like this, at a time like this, is an important step for us," Schollmeier said.

Graffinity, which was founded in 1998, has raised about €35 million in two rounds of financing. The partnership with Serono could bring the Heidelberg company up to €40 million in up-front and milestone payments over the course of the multiyear deal. Additionally, the partnership provides for royalties from any products that Serono develops from the compounds Graffinity provides.

"We participate in further milestones if a product goes forward," Schollmeier said. "Otherwise, the rights revert to Graffinity."

Graffinity's approach to drug development is based on chemical microarrays. Small molecules are immobilized on a carrier surface and provided in a screening-ready, standardized format. Incubation of the immobilized compounds with the purified and solubilized target protein yields comprehensive affinity fingerprints in a label- and assay-free procedure, the company said. Graffinity said that its combination of chemical microarrays of drug fragment libraries and a method for the standardized, label-free detection of compound-protein interactions makes assay development unnecessary.

"Our technology identifies target ligands on an affinity basis only," Schollmeier said. "The very small fragments we use - usually 100 to 200 daltons - are not usually accessible to high-throughput screening. But this lets us look at a chemical space with 10 [thousand] to 20 thousand components," which is manageable.

The agreement is strictly for drug discovery. "The first affinity fingerprints should take two to three months," Schollmeier said. "The development of a hit-to-lead program will follow, and the program will be carried on to the lead stage. Then we will hand over the program for testing.

"We deliver compounds, and the success criteria are clearly defined in terms of potency and chemistry," he added.

Graffinity also has collaborations with companies such as Aventis Pharma, Boehringer Ingelheim International GmbH, Eli Lilly and Co. and Pfizer Inc.