By Brady Huggett

AVI BioPharma Inc. and Exelixis Inc. began a five-year collaboration for antisense drug discovery research and development that combines the speed of both companies¿ technologies.

AVI will provide its proprietary Neugene morpholino antisense agents to Exelixis and its Cologne, Germany-based subsidiary, Artemis Pharmaceuticals GmbH, that it acquired last week in a $23.1 million stock-swap deal. Exelixis will define gene function in vivo on a genome-wide scale in zebrafish and other model organisms, validating and screening targets suitable for inhibition by antisense therapeutics. (See BioWorld Today, April 24, 2001.)

AVI will perform preclinical and clinical studies on antisense drug candidates arising from the collaboration. Any antisense products materializing from the alliance will be jointly owned and Exelixis will have a co-development option.

Alan Timmins, president and chief operating officer of Portland, Ore.-based AVI BioPharma, said the attraction to Exelixis was quality, quantity and speed.

¿[The collaboration means] access to more and better functional genomic targets faster,¿ he said. ¿This is an additional advantage we add to our rapid drug development capabilities.¿

Glen Sato, chief financial officer of Exelixis, said AVI simply has what Exelixis needs.

¿From our standpoint, it¿s their antisense technology,¿ he said. ¿That¿s the principle reason. We have been working with morpholinos, particularly with Artemis. It¿s the case that they become a prominent supply partner for us for these antisense agents.¿

Morpholino oligos, assembled from four morpholino subunits ¿ each with one of four genetic bases, linked to a six-membered morpholine ring ¿ are favored in antisense work because they are easily delivered into cells.

The companies will begin with the zebrafish, a model often used for drug targeting because of its transparent body and quick growth cycle. AVI will provide the Neugene antisense agents and Exelixis will determine functionally what genes are most important. Next comes finding the human analogues and seeing if they are pertinent, Timmins said. Again, the point is to shave off time to development.

¿[Exelixis has] rapid screening capabilities,¿ Sato told BioWorld Today. ¿They can move quite fast.¿ Timmins added that the Neugene antisense technology also reduces timeframes because through the technology, once the target is discovered, so is the drug.

Sato said the initial idea is to focus on angiogenesis, mainly because that has been the focus for Exelixis with its zebrafish. While Timmins agreed that cancer is an area of interest, he didn¿t limit the collaboration to certain directions.

¿It is not a cancer-focused collaboration; we expect a good variety of targets in a variety of areas,¿ he said. ¿We are open and they are open to any good targets.¿

Although the beginning of the five-year agreement will undoubtedly begin with the zebrafish, Timmins said that model won¿t require the allotted time.

¿There are an estimated 30,000 genes in the [zebrafish] genome,¿ he said. ¿[Exelixis] will be looking at all or most of those genes and we¿ll provide them with compounds for all or most of those genes. We¿ll cover that database in much quicker than five years. The remainder of the time will be focused on drug development aspects.¿ Timmins pointed out that the zebrafish is the focus of Artemis, but Exelixis has programs for Drosophila and Caenorhabditis elegans in the Bay area, so the companies could investigate those models as well.

The deal, while not involving typical up-front payments or research funding, does have the possibility of helping both companies¿ bottom lines.

¿It has revenue potential from the standpoint that it enhances our zebrafish work, by moving it quicker downstream,¿ Exelixis¿ Sato said. ¿No question, there will be value generated there that should generate additional revenues.¿

¿I think that if you are taking Exelixis and us, I think the potential for revenue is extraordinarily high,¿ Timmins said. ¿I think too, with co-development and owning targets and [us moving quickly] together, we have the potential for imminently partnerable targets with bigger pharma. We aren¿t just limited to ourselves for development. That¿s another way to generate revenue.¿

AVI BioPharma¿s stock (NASDAQ:AVII) climbed 29 cents Friday to close at $6.29.

Exelixis¿ stock (NASDAQ:EXEL) rose 7 cents, ending the day at $12.15.