LONDON ¿ Pharmagene plc has signed Bristol-Myers Squibb Co. (BMS) as the first subscriber to its gene target validation system, TargetEvaluator, in a two-year multimillion-pound contract.

Financial details were not revealed, but CEO Alistair Riddell told BioWorld International there would be an up-front payment followed by a fixed fee payable quarterly over the two years. If any of Pharmagene¿s data points appear in patent applications, further payments will be triggered. ¿We think we¿ve got a good deal and they [BMS] got value for money.¿

TargetEvaluator is a gene expression system that uses human tissue to determine expression profiles in different tissues and, in particular, to make comparisons between diseased and healthy tissue. ¿BMS will choose one-third of the genes that go into TargetEvaluator each month. A minority of the genes will be proprietary to them, and they have nominated the types of disease across which genes are profiled,¿ Riddell said.

¿In our view, by signing this deal with us, BMS provides a solid endorsement of our TargetEvaluator technology and its potential to play a pivotal role in the drug discovery process,¿ he said.

Riddell said he would expect future customers to pay a higher subscription rate than BMS because the system will become more valuable as more genes are added. The company has stepped up the marketing of TargetEvaluator in the U.S.

The deal with BMS is a breakthrough in terms of Pharmagene¿s commercial development. It has income from its Phase Zero service, which provides preclinical in vitro human tissue testing, and Riddell said revenues are growing well this year. ¿But this does not take account of the BMS deal. Growth hereafter will be pretty spectacular,¿ he said.

Pharmagene, based in Royston, Hertfordshire, also announced a new service, Indication Switch, to look for new indications for existing drugs coming off patent or for compounds that failed in clinical trials other than for reasons of toxicity. This follows the publication of a patent on a new use for 5HT2Beta antagonists in irritable bowel syndrome, which exemplifies the company¿s approach to finding alternative indications.

¿We are looking for people with an extensive portfolio of products that have failed in clinical trials or are coming off patent,¿ Riddell said. ¿The customer will pay for the research, but if we find new intellectual property on just one they would get a significant return.¿ He said the chances of finding new indications are about 5 percent, which is why it is important to have a large portfolio of compounds for testing.