National Editor

Focused on finding drugs in natural sources, Singapore-based MerLion Pharmaceuticals Pte. Ltd. - with a boost from US$13.5 million in its first round of financing last year - has nailed down its second collaboration with a U.S. firm, this time with Genome Therapeutics Inc.

The deal is intended to leverage Genome Therapeutics' validated antibacterial drug targets against MerLion's natural product libraries to select compounds for clinical development.

"Both companies will try to continue together and put the products [forward] as far as possible, but everything is open," said Richard Labaudiniere, senior vice president of research and development for Waltham, Mass.-based Genome Therapeutics.

Under the terms, the two firms will share costs of the early stage research, although in what proportions was not disclosed. Genome Therapeutics will provide screening assays to MerLion on target proteins known to be essential for the survival of many common pathogens.

MerLion will screen the targets against its natural product libraries to isolate and identify novel chemical entities with an inhibitory effect on the target proteins, and Genome Therapeutics will profile the active compounds for in vitro and in vivo antibacterial properties.

A joint research committee will monitor and direct the course of the research. Both companies have rights for lead optimization, clinical development and commercialization of lead candidates.

MerLion was established through the privatization of the former Centre for Natural Product Research, a unit of Singapore's Institute of Molecular and Cell Biology. The firm boasts one of the world's larger and more diverse natural product libraries for screening, along with high-throughput screening technology, assay development and medicinal chemistry.

And the fit with Genome Therapeutics is good, since the U.S. company has built its target protein portfolio by identifying key genes in the growth of bacteria, fungi and other pathogens. Between 60 percent and 80 percent of antibacterials on the market are from natural sources, Labaudiniere noted.

"They are certainly first in class, with long experience," he said, pointing to the importance of scientific strength in being "sure you can discard very quickly the bad player, the bad compound in an extract and concentrate on the right one."

MerLion, which raised $13.5 million in October thanks to a syndicate of international and Singapore-based venture funds, entered a deal the following month with Abbott Laboratories Inc., of Abbott Park, Ill., under which the latter is contributing therapeutic targets for MerLion to screen against its sample collection. Abbott is handling lead optimization, clinical development and marketing of any products worldwide, with research payments, milestones and royalties to MerLion.

Days ago, MerLion entered a deal with KuDOS Pharmaceuticals Ltd., of Cambridge, UK, deploying the latter's validated targets and MerLion's library against human papillomavirus-induced cervical cancer. MerLion will identify and characterize active substances against assays by KuDOS, which will push the compounds through initial pharmacological screening.

MerLion also has a deal with Johns Hopkins Singapore Pte. Ltd. related to Epstein-Barr virus-related cancers; one with Fujisawa Pharmaceutical Co. Ltd., of Osaka, Japan, related to Fujisawa's therapeutic targets; and agreements with Biotech Research Ventures Pte. Ltd. and the National Cancer Centre in Singapore for the development of high-throughput screens to discover anticancer drugs.

MerLion takes its name from a mythical creature said to have the body of a fish and the head of a lion. It's an image that may suggest a biological experiment gone bad, but has ancient derivatives. Singapore, site of MerLion's headquarters, comes from the Sanskrit words for city ("pura") and ("lion"), deriving from an Sumatran prince's long-ago sighting of a lion on the island. The fish-like body of the MerLion symbolizes modern Singapore's status a seaport and center of trade. Also, Singapore once was known as Temasek, which is Javanese for "sea."

But inventing a hybrid land-animal creature for its figurative coat of arms isn't what gained MerLion such demonstrated partnering clout, which more likely came with the credentials of its management - formerly with London-based GlaxoSmithKline plc, Labaudiniere told BioWorld Today.

"You don't find so many companies that have the assets and expertise at the same time," he said. "The chemistry has been very good between the two companies, and we share the same goal for the collaboration, which is to move the compounds into [investigational new drug applications]."

Genome Therapeutics' antibiotic Ramoplanin is in a Phase III trial for the prevention of bloodstream infections caused by vancomycin-resistant enterococci. A new drug application is expected to be filed in 2004.

Two other product candidates are in lead-optimization stage: an anti-ulcer treatment partnered with AstraZeneca plc, of London, and an anti-infective agent being developed internally.

"A lot of people have failed, but we have tried to have a very diversified platform," Labaudiniere said, pointing to several collaborations made in the past 18 months, including one with InterLink Biotechnologies LLC, of Princeton, N.J., which is also for access to a natural products library that will be exploited for purposes other than MerLion's.

"We'll be using theirs for cell-based screening," Labaudiniere said.

Genome Therapeutics' stock (NASDAQ:GENE) closed Tuesday at $1.70, up 3 cents.