By Karen Pihl-Carey

Paris-based Genset SA signed a collaborative research agreement with Abbott Laboratories to discover genes associated with biopolar disorder and Type II diabetes, two areas in which the genomics company focuses.

"We made the decision last year to specialize in two areas, CNS [central nervous system] and metabolism disorders," said Pascal Brandys, chairman and CEO of Genset. "So this is proof that we made the right decision."

The agreement with Abbott, of Abbott Park, Ill., is for two years and could be expanded, Brandys said. It will focus on certain candidate regions associated with the selected diseases.

"The initial focus will be on biopolar disease, and there is also a second objective on Type II diabetes," he said. "We'll start work later on the second disease."

Under terms of the agreement, Abbott will receive a license to develop and commercialize therapeutic and diagnostic products based on the genes identified through the collaboration.

The deal means an up-front payment for Genset, as well as research funding, research milestone payments for discovery of disease genes and their validation as drug targets, commercial milestone payments and royalties. Specific financial terms were not disclosed.

"We haven't disclosed the total payments of this agreement, but it's similar in size of those we did in the past," Brandys told BioWorld Today. "So these have been ranging from $30 [million] to $70 million in the past. We are in this range for this one."

The companies also have agreed that Genset may exercise its put option to issue $10 million of equity to Abbott, an exercise which Brandys said Genset will make soon. The put option is part of the companies' $42 million pharmacogenomics agreement formed in 1997. As part of that agreement, Genset is pinpointing multiple genes and polymorphisms associated with efficacy and side effects of drugs. Abbott, in turn, is developing, producing and marketing diagnostic systems derived from the genes and markers to test patient responses to drugs. (See BioWorld Today, July 29, 1997, p. 1.)

Genset uses its genomic and molecular biology technologies to help in the discovery, development and marketing of therapeutics. The company's technology includes its high-resolution biallelic marker map, a collection of signposts along the human genome, which encompasses human genetic diversity. In the collaboration with Abbott, the company will use these technologies to identify genes, enabling Abbott to develop treatments.

"I think Genset appears as a leader in neurogenomics," Brandys said. "And CNS applications raise many specific problems, so I think this specialty will provide us with many opportunities in the future."

The collaboration with Abbott is Genset's second partnership in its new focus areas. The first is with the Janssen Research Foundation in Beerse, Belgium, a subsidiary of Johnson & Johnson, of New Brunswick, N.J., in the field of schizophrenia.

"We have discovered and delivered the gene to J&J and the collaboration has been extended," Brandys said.

Genset pinpointed the precise location of a gene and established its association with schizophrenia through extensive genotyping and advanced biostatistical analysis. It intends to do the same in the agreement with Abbott.

In addition, the company wants to soon partner a third program in its new focus areas concentrating on Alzheimer's disease. "This is our next objective," Brandys said.

Genset's stock (NASDAQ:GENXY) closed Friday at $70, up $8.25, or 13 percent.