By Randall Osborne

West Coast Editor

PPD Inc. and Axys Pharmaceuticals Inc. said they have entered an agreement to marry off their joint venture progeny, PPGx Inc., to DNA Sciences Inc., in an acquisition deal that will join PPGx's study of gene variations on drug metabolism with DNA Sciences' efforts to link such variations to disease susceptibility and treatment response.

"We've gotten through adolescence, and now it's time to get out of the house," said Josh Baker, president and CEO of La Jolla, Calif.-based PPGx.

The deal is "closing quickly," and should be complete in the next few days, Baker told BioWorld Today. "We were up all weekend getting things signed."

Under the terms, DNA Sciences, of Fremont, Calif., will issue preferred stock to PPD, of Wilmington, N.C., and South San Francisco-based Axys, in exchange for all outstanding capital stock and options in privately held PPGx.

Before the final dotted line is signed, PPD will increase its equity stake in PPGx to an ownership that equals Axys', and will buy more preferred shares of DNA Sciences.

PPGx is focused on discovering predictive genetic markers for use in clinical trials. DNA Sciences' efforts involve discovering and commercializing gene-based clinical tests to determine disease susceptibility, predict its progression and manage treatment.

"Our orientation has been drug-affect pharmacogenomics - what sort of dose, what kind of drugs you should take," Baker said. "That was always part of DNA Sciences," he added, but not its primary interest.

The firms also will pool their patient-sample data.

"[DNA Sciences] brings access to patients and samples, and they do a lot of work with linkage studies in families, and we're getting access to those," Baker said. "We have a fairly substantial bank ourselves, coming out of the Sequana group."

Axys is the result of South San Francisco-based Arris Pharmaceutical Corp.'s takeover of La Jolla-based Sequana Therapeutics Inc. (See BioWorld Today, Nov. 4, 1997.)

DNA Sciences will make use of PPGx's certified service laboratories, as well as its commercial infrastructure. PPD, a contract research organization, will remain exclusive marketer and distributor of PPGx's pharmacogenomics products and services, and PPD will work with DNA Sciences to find more ways to apply the new firm's research to drug development.

"[DNA Sciences] is getting someone who is already in the marketplace," Baker said. "Veterans of biotech know that, a year from now, when the equity markets aren't so generous, companies with a deep discovery engine as well as a commercial setting are going to be better able to survive." n