By Randall Osborne

West Coast Editor

In an era of headline-grabbing genomics database deals that cast the broadest net possible, upstart Geneva Proteomics Inc. proved that's not the only way to draw money - by nailing down a more focused deal worth $84 million with Novartis Pharma AG, more than half of which comes in the form of an equity investment.

"That would be the minimum," said Cedric Loiret-Bernal, CEO of the Geneva, Switzerland-based firm. "This is Novartis' second largest deal after Vertex [Pharmaceuticals Inc., of Cambridge, Mass., which signed a potential $800 million deal with Novartis in May]." (See BioWorld Today, May 10, 1999.)

Under the terms of the agreement, Novartis, of Basel, Switzerland, will select three disease tissues or body fluids on which mass spectrometry specialist Geneva Proteomics will work, analyzing the protein profiles of these and their healthy counterparts.

Novartis then will choose intriguing proteins or peptides for more research and development.

Of particular significance in the deal, of course, are molecules with therapeutic potential, as well as biomarkers and novel targets as grist to be used with Novartis' lead discovery and characterization process - a perfect fit, Loiret-Bernal said, with his firm's "large-scale, industrialized genomics."

In the alliance, Novartis gets exclusivity for three years or longer for several hundred molecules and information on expression patterns studied, thus becoming what Geneva Proteomics calls its "preferred" pharmaceutical partner.

Of the $84 million, $43 million is an equity investment, and the remainder will be paid as fees, with more license fees, milestone payments and reimbursements possible if predefined criteria are met.

"The $41 million will be spread out over the next four years," Loiret-Bernal said, adding that some of the funding will be an undisclosed up-front payment.

"There's no disclosure of the amount of money that would also be coming our way, depending on how many of the proteins are deemed to be interesting enough to go into the clinic," he added.

Novartis "has probably done some of their own work, but that wouldn't be disclosed," either, Loiret-Bernal said.

Geneva Proteomics, which was founded in March, raised $40 million in July, and intends to file next year for an initial public offering. The company analyzes healthy and sick tissues and fluids in order to gather huge quantities of proteomics information, and will be synthesizing small novel proteins and peptides. (See BioWorld Today, July 19, 2000.)

The company has a small office in Evanston, Ill., and a larger site in Switzerland. Novartis' equity investment will go toward increasing staff numbers, Loiret-Bernal said, and establishing another location in the U.S.

"We would like to have approximately 100 employees here in Geneva, and next year, being a global company, we want to have a similar proteomics facility on the East Coast," probably in or near Princeton, N.J., he said.

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