Continuing to add drug discovery to its contract service business, Ricerca Biosciences LLC on Wednesday acquired from Eli Lilly and Co. small-molecule antibacterial targets and patents.

"We are a preclinical development company, so we're looking to work with partners to find targets and develop them," Ricerca CEO Prabhavathi Fernandes told BioWorld Today, stressing that the company is leveraging its drug development resources to gain a higher value beyond simply developing compounds for outsource partners. "The idea is that we should hold some ownership of these compounds, though as [solely] a contract service company we have no ownership of any compounds."

She emphasized that such a strategy does not reflect a desire for Ricerca to move away from its services, but rather complements such capabilities. Through its contract service business, Ricerca advertises its ability to move lead molecules from the discovery stage through the investigational new drug application and new drug application development phases.

But during the past year, Concord, Ohio-based Ricerca began seeking molecules for itself. The Lilly deal is the latest example.

Ricerca gained exclusive worldwide rights to select targets as well as select patents and knowledge from Lilly's small-molecule antibacterial program. Ricerca will own rights to develop and commercialize drugs based on the antibacterial targets. In exchange, Indianapolis-based Lilly will receive an up-front payment, as well as royalties and milestone payments for any drugs and drug candidates developed and/or co-developed by Ricerca.

"We also have given a small equity in the company, for which we have received a nice valuation," Fernandes said. "It's a very generous deal, a win-win for both of us."

Ricerca said it continues to seek other development partners to expand and commercialize antibacterial small molecules.

"We can take compounds and optimize them - we have all of the testing capabilities to get these compounds through to clinical trials," Fernandes said. "We will do this with partners, so there will be some milestone funding in exchange. We would then use our partners' capabilities to take them into the clinic because we do not do clinical trials."

This summer, Ricerca began building its infectious diseases program by in-licensing from Paris-based Genset SA the entire genomic sequences of Chlamydia pneumoniae and Chlamydia trachomatis. Ricerca gained rights to all anti-infective drugs developed in the program, while Genset received an equity position in Ricerca, along with patent issuance and development milestones and royalties. (See BioWorld Today, July 29, 2002.)

"There is no hardcore evidence, but there is a strong implication of Chlamydia pneumoniae involved in atherosclerosis," Fernandes said. "This is a new way to approach infectious disease treatment. There is a chronic inflammation in atherosclerosis, and Chlamydia has been implicated. We have identified a very good target in Chlamydia pneumoniae that we think gives insight into how the disease is caused."

She said the program eventually would progress with a development partner.

More recently, Ricerca entered a collaboration with Lawrence, Kan.-based ProQuest Pharmaceuticals Inc. to develop prodrugs-based anti-infective products.

In addition to anti-infectives, the company is licensing a portfolio of new genomic targets and lead candidate molecules in oncology. In the spring, Ricerca opened the doors to its oncology program by licensing the RAP-3 gene from Genset, which is being acquired by Geneva-based Serono SA. Ricerca will develop RAP-3 as a protein therapeutic following a familiar model. (See BioWorld Today, March 13, 2002.)

"That looks like it may have some early indications that may be useful as a protein potentially for liver cancer," she said. "It's very early, so we don't know because we still have to prove it and make the protein. It could also be a target in the oncology area, but it's still in the early stages. We have shown, though, that it does go through apoptosis. And as soon as we have more evidence, we will be looking for a partner for that protein."