By Brady Huggett

Just days after settling into an expanded screening agreement with Biogen Inc., NeoGenesis Inc. entered a research collaboration with Celltech Group plc that could net NeoGenesis at least $20 million.

Celltech, of Slough, UK, will provide the disease targets in its core therapeutic areas and NeoGenesis will use its chemical genomics technology, including its Automated Ligand Identification System (ALIS), to screen for drug leads. For its efforts, NeoGenesis gets a $10 million equity investment from Celltech, several years of research funding, and the lure of preclinical and clinical milestones.

In the event of a product approval, NeoGenesis is entitled to what its president and chief scientific officer, Satish Jindal, revealed were single-digit royalties.

¿But they are good numbers,¿ he said. ¿And the total milestones can be more than $10 million.¿

Richard Bungay, director of corporate communications and strategic planning at Celltech, would not disclose the position Celltech is gaining in NeoGenesis other than to say it is a ¿minority stake in the company.¿

¿We see the NeoGenesis technology as a much more rapid way of getting leads generated for molecules,¿ he told BioWorld Today, adding that the collaboration will focus predominantly in the area of immune disorders and inflammation. NeoGenesis¿ technology is attractive for the timeline compression it provides, he said.

¿You have the protein and you get a rapid readout on the kind of structures and shapes that will bind to your proteins,¿ Bungay said. ¿We see this as a huge, huge timesaver.¿

So do others. Privately held NeoGenesis, of Cambridge, Mass., has signed with Oxford Glycosciences plc, of Oxford, UK, revamped its relationship with Biogen, of Cambridge, Mass., and now signed with Celltech, all in the past 30 days, Jindal said. He explained why his company has been drawing such interest, starting with what he called an industry-wide ¿paradigm shift.¿ (See BioWorld Today, July 10, 2001.)

¿Most drug companies are making improvements on the conventional strategies,¿ he said. ¿What genomics needs is not incremental improvements but new strategies. They need strategies that can handle both the scale and the nature of genomic targets.¿ One of those methods, Jindal said, can be found at NeoGenesis.

¿The second reason is we have proven our technologies by providing leads against the most difficult discovery problems,¿ Jindal told BioWorld Today. Lastly, he said that with the public availability of genomic data ¿it¿s a contest to see who can deliver the most leads in the shortest time,¿ and Jindal likes NeoGenesis¿ chances.

The agreement is constructed for a specified amount of targets to NeoGenesis and a certain amount of leads given back per year. The deal is not limited by time, but with the speed of its technology, Jindal said, and NeoGenesis should deliver on its end ¿in a short period of time.¿

NeoGenesis has had plenty of action, but the company and its 80 employees are looking to continue to ride the paradigm shift, Jindal said, promising ¿two or three more [deals] in the next two or three months.¿

Celltech¿s stock (NYSE:CLL) fell $1.46 Thursday to close at $29.51.