By Mary Welch

Myriad Genetics Inc. signed a deal worth at least $26 million with Hitachi Ltd. that will use ProNet, Myriad's high-throughput proteomic screening technology, to expedite the discovery of novel protein-protein interactions for Japanese pharmaceutical companies.

Myriad, based in Salt Lake City, will receive an up-front license fee of $15 million and committed research funding of $11 million over the next three years.

"It's a strong deal, virtually all cash," said William Hockett, Myriad's director of corporate communications. "There's not a milestone or futures' type of payment arrangement here."

Myriad and Hitachi together will build a database that is specific to the Japanese market. "The market in Japan is different," Hockett said. "For instance, they have a high incidence of stomach cancer, where in the U.S. that is not a major disease. They have a relatively low incidence of breast cancer. We will build a database that will be of interest and use to pharmaceutical companies headquartered in Japan."

Tokyo-based Hitachi then will offer this designated ProNet technology to Japanese pharmaceutical companies. Myriad will receive a portion of the financial arrangement. In addition, Myriad will receive royalties on any drug developed and commercialized using ProNet.

"It's gratifying that ProNet is hitting its stride," Hockett said. "It is now being recognized as really powerful, efficient technology that delivers valid drug targets. We're really pleased with this deal."

Myriad's ProNet technology defines disease pathways through the interactions of proteins. The interactions can control processes, such as cell growth pathways, intercellular signaling, cell aging and programmed cell death. The pathways are discovered and evaluated by ProNet for their potential to be modified to disrupt the disease process.

Myriad has identified 19 potential drug targets for its internal programs and for collaborators. Internal programs are analyzing more than 110 novel protein pathways and have identified pathways that provide new approaches to the treatment of HIV and colon cancer.

Myriad's other ProNet partners are Berlin-based Schering AG; Bayer Corp., of Pittsburgh; Monsanto Co., of St. Louis; and Hoffmann-La Roche Inc., of Nutley, N.J. With the Hitachi collaboration, the potential value of ProNet deals is more than $170 million to Myriad.

"This deal gives Hitachi a virtual lock on proteomics in Japan," Hockett said. "They will be using our ProNet technology to really make an entrance into the life sciences in Japan. They want to make a large impact in a short period of time and they will now be a major force in biotechnology. Pharmaceutical companies in Japan have a strong appetite for biotechnology-based drug development technology and this allows Hitachi to jump in - a giant leap forward - and really make a big difference, a big impact in Japan."

Hitachi established a Life Science Group last year to promote the commercialization of biotechnology and plans to invest $56.6 million in research and development over the first three years. Initially the company will focus on bioinformatics services for DNA analyses and database services, as well as functional analyses of genes and proteins. It expects to generate sales of $1.82 billion annually by 2010.

Myriad Genetics' stock (NASDAQ:MYGN) closed Tuesday at $91, up $6.875.