By James Etheridge

BioWorld International Correspondent

PARIS ¿ The French drug discovery company Genfit SA is entering into two more research collaborations with European pharmaceutical companies, one of which has been formally signed while the other will be signed within a month, CEO Jean-Frangois Mouney told BioWorld International.

However, Mouney declined to name either company, saying only that they are new partners for Genfit and that each collaboration covers one of the three therapeutic fields in which the company specializes ¿ cardiovascular disease (especially atherosclerosis), inflammation and metabolic disorders (such as diabetes and obesity). He added that Genfit also will sign a collaboration agreement with a large American pharmaceutical company sometime next year.

These two deals will provide Genfit with research funding of at least EUR10 million (US$8.8 million) over three to five years, said Mouney, who pointed out that its existing collaborations had tended to generate significantly more funding than the minimum deal terms. Before concluding these latest agreements, Genfit was expecting to receive at least EUR20 million in research and development income and milestone payments over the next three years. In the longer term, it hopes to earn royalties from the sale of medicines arising from these collaborations.

Genfit, of Lille, was founded in September 1999 and is already engaged in research collaborations with seven pharmaceutical companies, four of which are shareholders in the company: Sanofi-Synthilabo and UCB Pharma, which are both based in the Paris region, Merck-Lipha, of Lyon, and the Strasbourg-based Franco-German company Aventis.

In June Genfit moved into new headquarters in Lille, and two of its partners, Merck-Lipha and UCB Pharma, subsequently set up separate research units on Genfit¿s premises staffed with their own researchers. Merck-Lipha operates a functional genomics unit to support the research program for discovering and developing new therapies for Type II diabetes it is conducting jointly with Genfit, while the UCB facility supports its work with Genfit in the area of inflammation and related allergic conditions.

Genfit specializes in identifying the genetic causes of disease and, among other things, claims to be a world leader in research on transcription factors and the role played by nuclear receptors in regulating the expression of certain genes.

Genfit¿s work on nuclear receptors constitutes one of three in-house research and development programs it is undertaking in addition to its collaborations with third parties. A second is in the area of cardiovascular disease, which Mouney described as a medium-term program that would not result in a valid drug candidate for at least three to four years. The third program was ¿more confidential,¿ said Mouney, but was in a therapeutic field that would ¿yield results in the near future.¿

Altogether, the company would be investing some EUR4.6 million in its own research programs through 2001 and 2002, said Mouney, who stressed that Genfit was engaged ¿not just in drug discovery and development but also in drug boosting and optimization.¿ Maintaining that ¿we are already living pharmacogenomics,¿ he said its objective was to develop made-to-measure therapeutic protocols for patients, such as the optimum combination of statins and fibrates to treat an individual cardiovascular patient.

Genfit is in the unusual position for a young biotechnology company of having made a profit in its first year of operation. Its net earnings amounted to EUR300,000 in 2000, while revenues totaled EUR2.4 million.

Although the company is profitable and has cash reserves equivalent to a year¿s revenues, Mouney said it intended to raise additional capital through a private funding round in late 2002 or early 2003. That will enable it to take drug candidates into clinical trials. Genfit¿s strategy is to take products as far as Phase II trials and then enter co-development and marketing agreements with pharmaceutical companies.

Genfit currently employs about 60 people, five who work for a specialist bioinformatics subsidiary called IT.Omics.