By Randall Osborne

West Coast Editor

On the brink of acquisition by Vertex Pharmaceuticals Inc., Aurora Biosciences Corp. nailed down yet another deal, this one for two years with Hyseq Inc. for screening the latter¿s orphan secreted protein collection.

¿There are a lot of other companies that could apply this technology [to secreted proteins],¿ said Doug Farrell, senior director of investor relations and corporate communications for San Diego-based Aurora. ¿We¿re just the first movers on it.¿

Aurora will use its CellSensor Panel ¿ various engineered cell lines that express beta-lactamase in response to modulation of discrete signal transduction pathways ¿ for the job.

¿There are bound to be some real gems here,¿ Farrell said, although no particular indication is the focus of interest. ¿It¿s more of a 30,000-foot approach¿ at this point,¿ he said. Aurora is granting Hyseq a nonexclusive license to some of its fluorescent protein technologies as part of the exchange.

Aurora also gets access to selected novel targets from cDNAs in Hyseq¿s database.

Financial details were not disclosed, but Aurora, while sifting through proteins for those that might work as drugs, will get up-front payments, licensing fees and technology access fees from Hyseq, and could get performance and development milestones, as well as royalties on Hyseq products.

Aurora may provide Hyseq with royalties, too, and will pay for database access, as well as a license fee.

Two months ago, Cambridge, Mass.-based Vertex said it aims to buy Aurora in a $592 million stock swap. The transaction awaits shareholders¿ approval, and the vote is due July 18. (See BioWorld Today, May 1, 2001.)

¿Essentially the shareholder votes are the only hurdles,¿ Farrell told BioWorld Today. ¿Looking at proxy reports, I can tell you it looks pretty favorable,¿ he added, with 98 percent [of them] positive about the merger on both sides.

¿If anything, this [collaboration with Hyseq] should give people confidence that what we said when the [merger] was announced is true ¿ that we will continue to make deals,¿ Farrell said.

Aurora¿s technology has netted business relationships with more than 20 other firms, including such heavy hitters as American Home Products Corp., of Madison, N.J.; Bristol-Myers Squibb Co., of New York; Eli Lilly & Co., of Indianapolis; Genentech Inc., of South San Francisco; GlaxoSmithKline plc, of London; Johnson & Johnson, of New Brunswick, N.J.; Merck & Co. Inc., of Whitehouse Station, N.J.; and Pfizer Inc., of New York.

¿There¿s been more done historically with large pharma, but the pressure is on for all companies to move ahead,¿ Farrell said. The deals are seldom quantified financially, but Farrell told BioWorld Today the ¿top five are all in the same ballpark, the $50 million range.¿

Many of the higher-value agreements have been expansions of existing deals, Farrell said, and the Hyseq collaboration, although it doesn¿t hit the $50 million mark, also is renewable.

Farrell said Hyseq¿s entanglement in a patent melee with Affymetrix Inc., of Santa Clara, Calif., and Incyte Genomics Inc., of Palo Alto, Calif., had ¿zero¿ effect on deliberations before the deal was done.

¿There will be a lot more of these battles [between database firms] in the future,¿ he said, adding that ¿even though Affymetrix looks like the front horse,¿ all the firms will spend a lot of money to settle the matter.

Aurora¿s stock (NASDAQ:ABSC) closed Wednesday at $24.54, down 74 cents. Hyseq¿s shares (NASDAQ:HYSQ) ended the day at $10.07, up 10 cents, and Vertex¿s stock (NASDAQ:VRTX) closed at $39.50, down $1.51.

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