Discovery genetics company Sequenom Inc. entered a strategic collaboration with Provid Pharmaceuticals Inc., a product-oriented drug discovery company operating in small-molecule therapeutics.

Sequenom will make an equity investment in Provid, which also will receive research funding to develop novel drugs based on Sequenom’s genetic targets. Provid also will receive undisclosed milestones and royalties on resulting products.

“We have taken a pretty significant stake in [Provid],” said Toni Schuh, Sequenom’s president and CEO, though he declined to provide a specific percentage. “We believe that Provid will be able to deliver lead compounds within 12 months.”

Initial work in the collaboration will focus on San Diego-based Sequenom’s lead cardiovascular disease candidate target, which the company’s population genetics program suggests is associated with heart disease in one of 12 people, or more than 20 million individuals in the U.S. alone.

“We found a gene that presents polymorphisms where the allele frequency dramatically shifts between young and old healthy people,” Schuh said. “So from this number, from the initial discovery, this gene has relevance for human health in a very significant portion of the overall population.”

Sequenom called it a potential blockbuster target, the first, the company believes, to move into a medicinal chemistry program.

“In our population genetics data, we see this gene affects the health of considerable percentage points of the entire American population,” Schuh said. “I think in this case probably about 8 percent of the American population’s health is affected by this gene.”

The contract includes an option to expand to further targets for other diseases.

Sequenom uses its MassArray system for disease gene discovery. The company recently released its MassArray 200K, an ultra-high-throughput genotyping platform that is an integrated and fully automated industrial-scale single nucleotide polymorphism analysis platform.

“We look for the non-conservative polymorphisms in the gene, meaning SNPs that cause structural change in the protein that gene codes for,” Schuh said. “You then can very quickly investigate how these structure changes affect the function of that protein. So you have a very straightforward biological validation of your genetic finding.”

Sequenom sees Piscataway, N.J.-based Provid as a logical partner to expand this finding.

“We are not looking into gene function and then trying to figure what compounds could interfere with the gene,” Schuh said. “We are looking into the change of a gene function, caused by a polymorphism. And we can mimic that change then with peptides, and then we can have peptide mimetics molecules made that mimic that change.”

On April 2, Provid licensed a broad portfolio of intellectual property from the University of Pennsylvania in Philadelphia in the field of small-molecule peptide mimetics.

“It’s a very good fit with our basic core technology in drug design and peptide mimetics,” said Gary Olsen, Provid’s president and CEO.

Schuh said, “This is why there is such a straightforward process and why we feel we can be successful quickly with Provid. [Olsen] is probably one of the world experts in peptide mimetics molecules, and that’s what they’re going to develop.”

Sequenom said it has discovered more than 120 high-impact candidate disease genes, each with a potential impact on the health of 5 million to 20 million Americans. In addition to cardiovascular disease, initial candidate portfolios are under investigation in various disease areas, including diabetes, osteoporosis, osteoarthritis, anxiety and depression. Sequenom owns 12 patents and has more than 50 pending patent applications based on those disease associations.

Privately held Provid, which started operations last year, has a business model that balances internal drug discovery with strategic corporate alliances to create small-molecule therapeutics using its strength in medicinal chemistry and its peptide mimetics technology platform. It is focusing internal efforts on autoimmune and infectious diseases, and also plans to partner with companies that need medicinal chemistry expertise.

Sequenom’s stock (NASDAQ:SQNM) fell 10 cents Wednesday to close at $6.73.