By Brady Huggett

Array BioPharma Inc. and Vertex Pharmaceuticals Inc. signed an agreement to discover and develop small-molecule drugs for two targets in the budding phosphatase protein family area.

The deal stipulates Array will be responsible for initial drug discovery, while Vertex, of Cambridge, Mass., is free to conduct its own research in the area and will be responsible for all aspects of clinical development and commercialization. Array will receive an undisclosed up-front fee and research funding for three years. Array also has the dangling carrot of milestone payments for products it discovers, then additional milestones if products are commercialized.

¿We will screen our library against two phosphatase targets as well as do structure-based drug design,¿ said Kevin Koch, president and chief scientific officer of Array. ¿We¿ll do molecular modeling and X-ray crystallography to generate leads. We are responsible for all aspects of lead generation and optimization of those leads. We¿ll profile those, and then hand them back to Vertex.¿

Vertex has been looking to enlarge its drug discovery scope, and Boulder, Colo.-based Array fit that mold, said Michael Partridge, associate director, corporate communications, at Vertex.

¿Array brings to the deal a certain capability in the phosphatase area, and that¿s very attractive to us as we expand our drug discovery into phosphatases,¿ said Partridge. ¿That really boosts our effort from that standpoint.¿

Koch also likes the match between the companies.

¿[Both companies] were actually founded on many of the same principles,¿ he said. ¿But we want to be the world leader in the generation of [investigational new drug applications], and Vertex wants to go fully downstream. They are about five or six years ahead of us, in the regard that they want to take products all the way to market.¿

¿Vertex is clearly a leader in crafting the new paradigm in drug discovery,¿ said Array CEO Robert Conway. ¿We¿ve always had great respect for them.¿

Neither side would discuss the financials of the arrangement, but Conway said the deal is ¿on a similar tack as our other drug discovery deals.¿

Phosphatases generally work by removing a phosphate group from a protein, thus disabling a biological pathway. Phosphatases have been linked to cancer and cardiovascular, autoimmune, inflammatory, metabolic and neurological disease. It is a young area with grand potential, Koch said.

¿[Phosphatases] are tremendously valuable,¿ Koch told BioWorld Today. ¿The kinases took about 10 to 15 years to develop therapeutic agents. But [phosphatases] have applications in many, many different areas, which is why Vertex and we think it is so important. It¿s leveraging your research dollars.¿

¿Phosphatases are a promising gene family,¿ Partridge said. ¿But research and development in this area is not in as an advanced stage as some other gene families are. In terms of drug discovery, phosphatases are probably where kinase drug discovery was five to 10 years ago.¿

Vertex has recently signed agreements with Deltagen Inc., of Menlo Park, Calif., and Consensus Pharmaceuticals Inc., of Medford, Mass. The collaboration with Array is in the same mold as those, Partridge said.

¿This collaboration fits in with a number of collaborations that Vertex has formed in which we are accessing and acquiring technologies and capabilities that will help us do drug discovery in a number of gene families,¿ Partridge said.

Array¿s stock (NASDAQ:ARRY) fell 4 cents Wednesday to close at $10.31. Vertex (NASDAQ:VRTX) fell 96 cents, ending the day at $36.18.