By Aaron Lorenzo

Armed with a new agreement in hand, Third Wave Technologies Inc. took another step toward unlocking a piece of the genomics mystery.

The Madison, Wis.-based company said it secured a worldwide exclusive license, except in Japan, for drug metabolizing enzymes (DMEs). Third Wave entered into the agreement with Riken (The Institute of Physical and Chemical Research), of Tokyo, for research and clinical diagnostic applications to patents covering more than 3,300 genetic markers within 200 genes that regulate drug metabolism.

While terms were not released, Third Wave Chairman and CEO Lance Fors said the deal involved an up-front payment to Riken and an agreement for future royalties. A prior relationship between the two parties, in which Riken used Third Wave¿s Invader genetic analysis platform, helped pave the way for the new agreement.

¿That¿s part of our general strategy,¿ Fors said, ¿to develop long-term relationships with our customers.¿

He added that to his knowledge, Tuesday¿s agreement marked the first time Riken had ever licensed any of its discoveries to a non-Japanese company.

The genetic markers were discovered as part of the Japanese government¿s SNP (single nucleotide polymorphism) Initiative, which Third Wave called the world¿s largest genotyping project.

¿Increasing the availability of data can be used to accelerate drug discovery and understand the impact of genomics medicine,¿ Fors said.

DMEs are regarded as significant in the way they help a person break down a drug for its therapeutic effects. Variations among DME genes affect how an individual responds to a given drug relative to another individual. One person could respond positively to a drug, while another might suffer a negative response. And another person might not respond at all.

Understanding these differences could be a key in prescribing drugs tailored for an individual rather than an entire population, thereby decreasing the incidence of inappropriate drug prescriptions and dosages. That then could reduce adverse drug reactions (ADRs), which according to a report published in the American Journal of Medicine, are the fourth leading cause of death among Americans. More than 106,000 deaths occur in the U.S. every year because of ADRs, meaning only heart disease, cancer and stroke have higher rates of morbidity.

¿It¿s critical to the whole process,¿ Fors said. ¿All you have to do is look at the broad-based numbers.¿

The burgeoning costs of drug development could also be reduced through the development of DME markers, Fors said. By using DME markers to increase efficiency in every phase of drug development, they could become useful in eliminating potentially toxic compounds in their earliest development phases.

Now in possession of a broad portfolio of DME markers, Third Wave finds itself in a position to further establish itself in the pharmaceutical market. The technology could also be used to revitalize drugs withdrawn from the market because of adverse reactions.

¿This almost positions us in the pharmaceutical value chain,¿ Fors said.

He also envisions future collaborations with managed care companies, who also deal with the fallout of ADRs as they are charged with the care of improperly treated patients.

Third Wave¿s technology used in the discovery of the DME markers relies on simple, precise enzyme sub-strain reactions, similar to the way antibodies work.

¿You really don¿t get a false positive, or a false negative,¿ Fors said.

Most other DNA technologies discriminate by hybridizing a specific sequence, a technique Fors said has limited accuracy.

Third Wave¿s stock (NASDAQ:TWTI) gained $1.21, or 16 percent, Tuesday to close at $8.74.