By Brady Huggett

There are events in the histories of some companies that definitively score their progress ¿ the recent potential $400 million deal with Eli Lilly and Co. for Isis Pharmaceuticals Inc. is one; the potential $2 billion deal between ImClone Systems Inc. and Bristol-Myers Squibb Co. is another.

Immusol Inc. had a defining event of its own Monday, signing a deal with Novartis Pharma AG that may net it more than its official $150 million valuation.

The five-year collaboration calls for San Diego-based Immusol to deliver at least 50 targets to Novartis in the oncology area. Immusol will use its Inverse Genomics technology to discover de novo biologically validated targets for Basel, Switzerland-based Novartis. Novartis will then develop compounds designed to treat cancer. But the $150 million valuation could end up being modest, depending on how those compounds do in the clinic and how many make it to the promised land of product commercialization.

¿We wanted to be conservative with the value of the deal,¿ said Niv Caviar, Immusol¿s vice president, business development and marketing. ¿But it could be higher [than $150 million] if even only a handful of the these drugs become successful commercial products. We are hopeful that the deal could range to the hundreds of millions of dollars depending on the success of the biologically validated drug targets.¿

The financials for privately held Immusol fit the customary biotechnology deal: an up-front license fee, research and development funding, milestones based on development and royalties on approved products. The up-front payment includes an equity investment Caviar placed at ¿a large multimillion-dollar¿ level.

The collaboration will seek to identify drug targets associated with tumor suppression, repressors of tumor suppression, inhibition of apoptosis and oncogene pathways. From those four areas, Caviar said Immusol isn¿t sure what sort of targets it will turn out, but Immusol will have the chance to develop targets Novartis doesn¿t find delectable. Novartis can license the candidate later at ¿discrete milestones¿ if it so pleases, Caviar said. Royalties on marketed products developed by Novartis will be standard single-digit figures, Caviar said, but for approved products that Immusol screened and then licensed back to Novartis they could range from single to double digits.

¿This deal has a bimodal structure,¿ Caviar said. ¿Immusol will produce the targets but will also be able to take some of the targets and do small-molecule development through partnerships.¿

What sets Immusol apart, Caviar said, is its technology that works in reverse. It involves the use of a library of more than 10 million ribozymes to inhibit gene expression and affect a therapeutic outcome. Then the platform works to identify the gene or genes associated with the desired effect.

¿We actually start with a biological function,¿ he said. ¿We identify a function using our ribozyme library. Once we identify a biological phenotype, we work backward to identify the gene, thus the name Inverse Genomics. Most start with the gene sequence and move forward to characterize the biology.¿

Immusol, which calls itself the Inverse Genomics Co., is trying to become a fuller, rounder biotechnology company in general.

¿We are actually an integrated drug company,¿ Caviar said. ¿We develop ribozyme therapeutics also. We have three therapeutic areas: proliferative eye disease, dermal disease and coronary restenosis.¿ Caviar added that Immusol will file with the FDA to begin a Phase II trial of Vitrenase for eye disease within a month, making it the cornerstone in a ¿small but emerging clinical area.¿

Immusol signed with Medarex Inc., of Princeton, N.J., in February to develop antibody therapeutics. Later that month, it signed a deal with Chugai Biopharmaceuticals, of Tokyo, to provide cancer targets. (See BioWorld Today, Feb. 21, 2001.)

¿Every deal that we have done, each one has also invested in the company and we think that¿s a testimonial to our company,¿ Caviar said. ¿No. 1, this deal validates our technology platform. Two, it shows the respect and the market demand for biologically validated drug targets. Three, it positions us as a fully integrated drug company.

¿We think this is one of the biggest deals of the year,¿ he added. ¿We liken this deal to the deal between Isis and Lilly. It¿s transforming for us.¿

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