HAMBURG, Germany - Evotec AG signed a drug discovery service agreement with Knoll AG. The contract extends through 2001 and is worth several million marks.

Knoll AG, of Ludwigshafen, is a wholly owned subsidiary of BASF AG, and forms the core of BASF Pharma, the global pharmaceutical operations of BASF.

Knoll concentrates on drugs against adiposity, cardiovascular diseases, diseases of the peripheral and central nervous system, gastroenterology and wound healing.

Under the terms of the agreement, BASF Pharma will deliver up to 10 targets of different categories for screening. "We will develop miniaturized assays for these targets and then screen against a library of several hundred thousand compounds using our Evoscreen technology platform," Anne Hennecke, of Hamburg-based Evotec AG, told BioWorld International.

"BASF will deliver its proprietary compound library to us, and we view this as an important mark of confidence. Besides, shipping of such a library is very simple, because we need only very tiny amounts of each compound due to our unique detection technology." She said with Evotec's technology platform, assay development would take only one to two months. "So we expect to finish the task by the end of 2001."

The objective is to discover new drugs for the treatment of diseases, but as the agreement is a service contract, Evotec will receive service fees, but no royalties. However, the contract includes an option to extend the scope of the collaboration during the contract period. "This might include screening the targets against our own proprietary library of 300,000 compounds," Hennecke said. "We would then have to negotiate about royalties."

She said Evotec was in discussion with numerous other companies to further extend the growing service part of the business.