By Aaron Lorenzo

Discovery Partners International Inc. continues to look to the future as news of its most recent deal broke Thursday afternoon.

The company entered into a multiyear agreement with Pfizer Inc. to develop and produce libraries of high-purity chemical compounds to be used in Pfizer¿s drug discovery programs.

¿It¿s indicative of a direction we would like to head in on two counts,¿ Discovery Partners¿ director of investor relations, Amy Caterina, said. ¿One, I think we¿d like to see more larger, long-term contracts because they give you more stability. Secondly, it also is a collaborative agreement. And we really see our strength as a collaborative drug development company. So we not only help companies design drugs, we can actually make or produce the drugs, and then we can also test them. We can provide a full range of drug discovery services to our customers, and I think that¿s going to be the future for this company.¿

Discovery Partners said the potential value of the four-year collaboration is $95 million, but specific financial terms were not disclosed.

San Diego-based Discovery Partners and Pfizer will design and develop custom libraries of drug-like compounds that will be exclusive to Pfizer, of New York. The companies have a history that helped pave the way for the new deal.

¿We¿ve been working with Pfizer for a number of years,¿ Caterina said. ¿But this is really the first large deal that we have signed with them, the first deal of this magnitude.¿

Discovery Partners will manufacture and purify the compounds using its Accelerated Retention Window Process purification technology.

¿Pfizer has some very aggressive goals as far as production of compounds that they want to add to their system,¿ Caterina said. ¿We are one of the companies that they are going out to, to help them achieve those goals. We are doing design and production of chemical compounds for [Pfizer].¿

Discovery Partners entered into a number of other deals earlier in the year, including a project that focuses on a new class of biological targets with Maxia Pharmaceuticals Inc., also of San Diego. (See BioWorld Today, July 20, 2001.)

¿We¿ve been very busy this particular year,¿ Caterina said. ¿We¿ve expanded our collaboration with Maxia, we¿ve expanded our collaboration with Takeda Chemical Industries [Ltd.], of Japan. We also signed a major deal with Merck [& Co. Inc., of Whitehouse Station, N.J.], which is a major multiyear chemistry deal, in October. We signed a deal with DuPont Crop Protection for compounds as well, so we have been very busy.¿

The duration and scope of the Pfizer collaboration enhances Discovery Partners¿ ability to anticipate consistent revenue streams and allows the company to reaffirm its fiscal 2002 financial guidance for revenue growth in the 25 percent range.

¿We¿ve done a lot of growth internally through acquisitions of other businesses or technologies,¿ Caterina said. ¿Through that, we¿ve increased our capacity to take on additional business. So now I think what you¿re seeing is the inflow of that business.¿

The company offers integrated services and products that span the drug discovery process, including target characterization, high-throughput screening, lead generation, lead optimization, high-throughput synthesis automation and gene expression analysis.

Discovery Partners¿ stock (NASDAQ:DPII) gained 47 cents Thursday to close at $6.50.