Genome Therapeutics Corp. entered an agreement with Amgen Inc. to identify and develop therapeutic agents for bone diseases, including osteoporosis.

Genome Therapeutics will receive from Amgen an undisclosed up-front cash payment and sponsored research funding. The Waltham, Mass.-based firm also could receive additional milestone payments and further downstream consideration depending on the success of discovery, development and commercialization.

"We've been working on this collaboration for quite a while, so it's nice to be able to start off the year by announcing it," Steven Rauscher, president and CEO of Genome Therapeutics, told BioWorld Today. "A company like ours needs to be able to tap into the capability of a larger biopharmaceutical company to bring products to the marketplace."

Genome Therapeutics labeled the total potential additional payments as within a range consistent with its previous discovery agreements focused on chronic human diseases. Two other deals, one focused on asthma with Madison, N.J.-based Schering-Plough Corp. and another focused on osteoporosis with Wyeth, also of Madison, range in potential value from $67 million to $118 million, respectively.

Population genetics, the source of Genome Therapeutics' approach to target discovery, is at the center of its latest collaboration as well.

Both companies will participate in research efforts to discover one or more drug candidates suitable for development. As part of their research, the companies may use genetic information developed by Genome Therapeutics based on research conducted at the Creighton University Osteoporosis Research Center, which has been exclusively licensed to Thousand Oaks, Calif.-based Amgen.

"We start with populations that share either a disease or a common phenotype, and we seek to discover the genes that are associated with those phenotypes," Rauscher said. "That's one of the assets we will use in the Amgen collaboration."

He said the formula has worked so far - Genome Therapeutics has discovered genes in both its prior collaborations of this nature, advancing them to high-throughput screening.

"Not only were they gene discoveries, but also they were a good starting point for drug discovery," Rauscher said. "We'll use that same approach in our collaboration with Amgen."

He pointed to Amgen's capability of developing a variety of therapeutics, such as large or small molecules, as useful in working to treat such a broad indication. It is estimated that osteoporosis can result in 1.5 million fractures every year, with one of two women and one in five men at risk of developing an osteoporosis-related fracture in their lifetime.

Genome Therapeutics is involved in six other discovery alliances, including a partnership extended earlier this week with Wyeth. The collaboration is designed to develop osteoporosis therapeutics using genetic information from a family with very high bone density but otherwise normal bones. Genome Therapeutics identified a mutation in the LRP5 gene that results in the high bone mass trait. The program has entered the high-throughput screening phase of preclinical development.

The extension is expected to last through December, with total payments to Genome Therapeutics throughout the entire partnership, excluding royalties, possibly reaching $118 million. The company already has received $9 million.

But Genome Therapeutics called this latest agreement the first in which it participates in downstream discovery efforts.

"It's a validation of the approach that we're taking, showing that the use of population genetics as a tool to find important new targets for starting points for drug discovery is alive and well," Rauscher said. "From a business standpoint, it's always good to get additional research funding and get another potential product on the table. And this deal has some features consistent with we're trying to do as a company - move downstream in our discovery research capabilities, beyond just target identification, as we progress toward being a fully integrated pharmaceutical company."

Genome Therapeutics' most advanced product candidate, Ramoplanin, is in a Phase III trial for the prevention of bloodstream infections caused by vancomycin-resistant enterococci. Licensed in October 2001 from Gerenzano, Italy-based Biosearch Italia SpA, the antibiotic program is being expanded for additional claims. Genome Therapeutics plans to study the drug to treat Clostridium difficile toxin-induced colitis.

"We have recently completed a clinical trial on a new dosage form showing that is has the same impact in the gastrointestinal tract as the dosage form that we're using in the vancomycin-resistant enterococci trial," Rauscher said. "We're still looking to file a new drug application on that product toward the tail end of 2004."

Two other product candidates have entered the lead-optimization stage of preclinical development - an anti-ulcer treatment being developed in collaboration with London-based AstraZeneca plc and an anti-infective agent being developed internally. Notably, Rauscher said all of Genome Therapeutics' collaborations have advanced products into high-throughput screening.

"All of these continue to be alive and well," he said. "We're hitting our milestones. Some of the next milestones to look for from us include moving one of our Schering-Plough infectious disease alliances to the lead-optimization stage, and we have some internal compounds that are moving toward lead optimization as well."

Genome Therapeutics' stock (NASDAQ:GENE) closed Thursday at $1.81, up 24 cents, or 15.3 percent. Amgen's shares (NASDAQ:AMGN) closed at $49.32, up 98 cents.