By Karen Young

Sunesis Pharmaceuticals Inc. entered its first research collaboration, a deal that could be worth $22 million to $30 million, with Chiesi Farmaceutici S.p.A. to discover and develop small molecules that inhibit a well-validated protein-protein target involved in immunological diseases.

The agreement stipulates that Sunesis will receive up-front payments, research and development milestones and royalty payments based on sales. Parma, Italy-based Chiesi will have an exclusive option to an exclusive license to develop and market any resulting products in Europe and Latin America.

¿It is our first partnership, and unlike typical first-deal situations, what makes this special is that we did not have to give up worldwide rights,¿ said James Young, CEO of privately held Sunesis, based in South San Francisco. ¿And we offset the discovery costs and generate milestone and royalty revenue. We retain exclusive rights in two major markets, North America and Japan. That¿s not typical for a small company.¿

The deal could exceed the $22 million to $30 million range depending on the number of indications and compounds, excluding royalties, Young said.

Sunesis will receive from Chiesi research funding, development capabilities and data, and marketing expertise in Europe.

¿It is a good model for future deals, for how to structure them in a way that preserves terrific upside through retention of U.S. rights; however, we will be doing exclusive worldwide deals with the multinational pharmas, and we¿re working on them right now with the aim of having one or two by mid-2002,¿ Sunesis¿ senior vice president of operations, Steve James, told BioWorld Today.

The deals with pharmaceutical companies will be ¿more customary,¿ James said.

Sunesis officers declined to disclose the exact target of the research out of respect for Chiesi¿s wishes.

¿This target we¿re working on is established and is known to have multiple indications,¿ James said.

Young added that it offers ¿a substantial market related to immunological disorders.¿

Sunesis will be using its discovery technology, which is different than traditional high-throughput library screening in that Sunesis first screens small drug fragments, which provide information-rich starting points for medicinal chemistry, unlike random hits from a high-throughput screen, said Jim Wells, Sunesis¿ president and chief scientific officer.

¿This allows us to access extremely large chemical diversity ¿ tens of millions [of compounds] ¿ which are necessary for finding small molecules for protein-protein and intractable enzyme targets,¿ Wells said.

¿We would be aiming to propose development candidates in the next two to three years,¿ Wells said.

Sunesis raised $60 million in a private financing in July 2000 and $25 million in December 1999. (See BioWorld Today, July 13, 2000, and Dec. 6, 1999.)

¿It¿s fair to say that we¿re in a very strong cash position for the foreseeable future, which allows us to pursue a number of internal programs, such as in the areas of immunology, metabolic disease and central nervous system,¿ James said.