By Mary Welch

In its first major deal, Elitra Pharmaceutical Inc. may receive up to $30 million from LG Chemical Ltd. to discover and develop novel antimicrobial drugs.

San Diego-based Elitra will receive a total of $30 million in up-front equity, research funding and milestone payments if the research continues for the entire five years of the deal and only one compound from the collaboration reaches the market.

"We're very pleased because we were able to access their capital and retain the U.S. marketing rights," said Alana McNulty, Elitra's vice president and chief financial officer. "It also allows us to leverage our database of over 700 essential gene drug targets and access the strong chemistry and antibiotic development expertise of LG Chem."

In addition to the payments, Elitra will share rights with LG Chem in Western Europe for any commercialized products, and LG Chem, based in Seoul, Korea, will have exclusive marketing rights in all territories outside of North America and Western Europe. Both companies will pay reciprocal royalties in their exclusive commercial territories.

Elitra will apply its proprietary gene-to-screen functional genomics technologies to identify essential genes in bacterial and fungal pathogens, and will prioritize gene targets for the collaboration. LG Chem will select specific targets for screening by Elitra, and will be responsible for chemical optimization of lead compounds and preclinical development. The two will share responsibilities for global development of all drug candidates.

"We have a method for identifying essential gene targets that is extremely fast - much much faster than what we know about our competitors," McNulty said. "We identified 700 essential gene drug targets in the last 12 to 18 months and can identify 100 such essential gene targets a month."

The gene-to-screen technology platform will allow a miniaturized drug screen to be developed for any validated target in Elitra's proprietary database within two to three weeks.

In fact, the company's goal is to identify more than 1,500 antibacterial and anti-fungal targets by the end of the year. Within the next 12 months, Elitra plans to have developed a proprietary relational database of more than 2,000 validated drug targets for the major fungal and bacterial pathogens. Bioinformatic analysis of these data will allow Elitra to rapidly prioritize candidate target genes.