By Randall Osborne

West Coast Editor

CuraGen Corp. and Genentech Inc. renewed their research collaboration for another two and a half years.

¿We¿ve realized a significant amount of money,¿ said Mark Vincent, spokesman for New Haven, Conn.-based CuraGen. The renewal entails ¿a seven-digit payment for services we¿ve provided to date,¿ he said.

CuraGen and Genentech, of South San Francisco, entered the potential $55 million deal in 1997. Under the terms, Genentech was to buy up to $5 million worth of CuraGen stock and provide a $26 million line of credit. Last fall, CuraGen exercised the loan option, borrowing $10 million. In the drawdown, CuraGen converted the cash into common shares at a rate of $16.366 per share. Genentech is providing up to $24 million in funding over the five-year period. (See BioWorld Today, Nov. 25, 1997, p. 1; and Oct. 20, 1999, p. 1.)

The platform offered by CuraGen, to which Genentech got access in the deal, includes the GeneCalling system for gene expression analysis and gene discovery; the PathCalling system for discovering the roles of genes and the proteins they encode in biological pathways; and the GeneScape bioinformatics operations system of web-based project management, data analysis and visualization.

Genentech researchers will specify disease systems and generate data sets through the GeneCalling and PathCalling systems.

Genentech also has exclusive rights, during specified periods, to evaluate discoveries made and license them for an additional fee. When the exclusivity period is over, the rights to unlicensed genes and to the data revert to CuraGen for inclusion in the databases. Genentech will pay milestones and royalties for each product developed under a license.

¿They¿ve expanded the number of projects they¿re going to do, and [the collaboration is] project-based,¿ Vincent said. ¿We¿ve delivered a number of genes to them. The next step is to work on the genes.¿

CuraGen¿s stock (NASDAQ:CRGN) closed Thursday at $30.875, down $3.125. Genentech¿s shares (NYSE:DNA) ended the day at $136, up $8.