By Kim Coghill

Washington Editor

MDS Inc. and Signature BioScience Inc. signed a deal worth a minimum of $10 million that calls for MDS, of Toronto, to develop Signature¿s microwave spectroscopy instrumentation.

The companies would not discuss financial details, but pointed to a press release disclosing that up-front fees to Signature will total $10 million, and other milestone and royalty payments for Signature are part of the package. In exchange, MDS gains exclusive license rights to commercialize research instrumentation and peripherals based on microwave spectroscopy instrumentation (MSC).

Mark McDade, CEO of Hayward, Calif.-based Signature, said his team sought a relationship with MDS because of the company¿s reputation as a leader in the use of mass spectrometry in instrumentation.

¿Given their leadership position in terms of sales and new technologies, our technology clearly fits in the space that was of interest to them, and their ability to develop very sophisticated instrumentation on a rapid pace and then sell them successfully was very important to us,¿ he said.

McDade said the alliance will focus on molecular and cellular analysis.

¿The molecular analysis will look at proteins either alone to understand new aspects about them physically, or molecular analysis will look at the effect of a small molecule of a drug on a given protein,¿ he told BioWorld Today. ¿Then, we anticipate cellular analysis systems. For example, you can grow cells and then introduce a protein or a small molecule drug into the cells, and immediately see the effect of what you¿ve added on that cell population. This is brand new research instrumentation that provides real time analysis for functional rehab that, until these instruments are introduced, have never really been available before.¿

The resulting new instruments will be sold, marketed and serviced by MDS under Signature¿s WaveSpec branded technology, as part of the MDS Sciex family (the analytical instrumentation division of MDS Inc.).

Signature is a fairly young drug discovery company that has yet to publicize specific diseases its drug products will target, McDade said. The company¿s WaveScreen microwave technology looks at functions of proteins or their interactions with small molecules.

Founded in late 1998, Signature employs 98 people and recently raised $43 million in a self-managed private placement. Since its inception, the company has raised $64 million. (See BioWorld Today, July 10, 2001.)

In its latest move in mid-July aimed at reviving WaveScreen, Signature bought Cambridge Discovery Chemistry Inc. from Millennium Pharmaceuticals Inc., of Cambridge, Mass. The deal includes a two-year collaboration between Signature and Millennium. (See BioWorld Today, July 17, 2001.)

MDS Inc., a health and life sciences company, operates in 24 countries and has revenues of $1.4 billion.