By Matthew Willett

More access, more reach, more money for expansion.

That's what Tularik Inc. sees in Bavaria, and that's what the South San Francisco gene regulation company is aiming to tap with the founding of a German operation, Tularik GmbH, in Regensburg.

"There were a number of reasons we went into Europe," Tularik Chief Financial Officer Corinne Lyle told BioWorld Today. "The first and most important reason is that while we have access to a lot of great technology in the Bay Area and Silicon Valley, we're also observing a tremendous amount of resources put into biotech in Europe and particularly in Germany, and we wanted to be on the ground there to have access to these technologies."

And the cost-to-benefit ratio isn't bad, either, Lyle added. "On the equipment side, to establish a group over there with respect to capital expenditure and building infrastructure, costs are similar and maybe even a little more expensive than they are here. To acquire very qualified scientific personnel is actually more reasonable than it is over here, but the ancillary costs, the travel savings, etc., make this, over the long run, a trade-off that's worth it."

Bavaria, and the Munich area in particular, has become a hot spot for biotechnology companies, Lyle said, and the opportunity to work in collaboration with those companies was a compelling factor in the decision to expand operations to Regensburg on the banks of the Danube.

"The entire country has really gone through a huge stir of biotech, partially because the government sponsored a lot of companies, and with the venture capital community there's been access to capital for a number of local companies," Lyle said. "That has really precipitated a huge number of new companies being formed over the past few years."

That venture capital community won't be unwelcome if the company decides to pursue investment in the future, she added. For the time being, though, Tularik will seek to expand its business overseas.

"We have high-throughput screening capacities being established as we speak," Lyle said. "We might provide target screening to [German biotechnology companies]. Those small companies can work with big pharmaceutical companies, but we think we offer them an interesting alternative by potentially allowing them to retain at least some of the economic rights down the road. With pharmaceutical companies you often end up selling the target outright. We're thinking about that kind of business model, and down the road, about screening our own targets."

Tularik now has four compounds in clinical testing, Executive Vice President Andrew Perlman said. T67 is the company's lead anticancer agent under evaluation against multidrug-resistant tumors, in Phase II trials. An analogue of T67, T607, is in a Phase I dose-escalating study.

T64, Perlman said, is in Phase II testing, and the company also is testing T64 as a part of combination therapy with several different anticancer agents. T611, a candidate for treatment and prevention of cytomegalovirus, recently completed the multidose segment of a Phase I test.

The company's pipeline strength, he said, is in the ability to find targets and candidates.

"Currently, our infrastructure is such that we typically are working on 50 or so targets at any one time," Perlman said. "We have a capacity to screen more than 50 targets against a library of compounds, resulting in our pipeline of leads constantly being renewed, and we're continually prioritizing. The ones that seem the most promising we'll work on, and we can work on about 20 at any one time. The compounds selected from those advanced leads will likely become clinical candidates."

As if to illustrate its dedication to tapping overseas markets, Tularik also announced that it will host an international event at its corporate headquarters in South San Francisco today from 10 a.m. to noon. The event is designed to help local businesses identify and exploit untapped commercial biotechnology opportunities outside the U.S.

Tularik's stock (NASDAQ:TLRK) fell $1.47 Monday to close at $20.15. n

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