By Mary Welch

Millennium Predictive Medicine Inc. and Bristol-Myers Squibb Co. started a $32 million pharmacogenomics research effort to develop clinical markers that will be used to make tests and drugs to treat patients according to their individual genetic sensitivities and responses.

The five-year deal calls for New York-based Bristol-Myers Squibb (BMS) to pay Millennium $32 million in license and annual fees and research funding. Milestone and royalty payments also could be earned by Millennium.

"The $32 million is guaranteed and then there is potentially quite substantial financial rewards subsequent to commercial success," said Kenneth Conway, president of Millennium Predictive Medicine (MPMx). "We believe it's one of the largest pharmacogenomics partnerships so far and it is unique in that it involves new compounds and marketed products, such as Taxol, all within the same drug class."

BMS' Taxol is the world's leading anticancer drug.

Pharmacogenomics is the use of genetic information to develop therapies to treat a specific patient population or even an individual patient - essentially customized medicine. The goal is to identify and validate oncology clinical markers - genes or proteins - that can help predict patients' responses to specific cancer treatment regimens and aid the development of new cancer therapies. The clinical markers linked to drug response or tumor types will be identified through the use of both companies' genomics and bioinformatics technology platforms.

MPMx, a majority-owned subsidiary of Millennium Pharmaceuticals Inc., of Cambridge, Mass., and BMS will form a joint research committee to define the research program and bring together the tools and capabilities of both companies, he said.

"Through MPMx, we can leverage the Millennium technology, the high-throughput screening processes and our bioinformatics tools," Conway said. "With Bristol-Myers, you have the No. 1 company in oncology. Through them we are able to access a great number of patients in trials as well as novel therapeutic compounds. It's a very integrated partnership."

The integration involves using clinical trial centers, pharmacogenomic studies of both new and existing drug therapies and the development of pharmacogenomic tests. Heading up the BMS effort will be Nicholas Dracopoli, former vice president of research and development for Genos Biosciences Inc., of La Jolla, Calif., a joint venture between the former Sequana Therapeutics Inc., of La Jolla, Calif., and Memorial Sloan-Kettering Cancer Center, of New York.

The alliance will coordinate the development of therapeutic products and pharmacogenomic tests with any resulting therapeutics products to be marketed by BMS. At least one diagnostic partner is being sought as part of the effort to commercialize molecular-based tests. And they will seek associations with cancer treatment centers for clinical research and tumor sampling. The participating diagnostic companies would bring any pharmacogenomic tests to market.

"The deal is incrementally positive to the Millennium story," said Robert Toth, vice president of Prudential Vector Healthcare in New York. "They already have one oncology partnership with Becton-Dickinson and this bolsters that. In terms of size of the deal, it's OK. From a timing perspective, you won't see anything come out for four to five years. It'll be a while before you see a bang for the bucks."

MPMx's vision is to "change the practice of medicine," Conway said. The company's initial focus is on life-threatening diseases, so the value of genomics will be known quicker, he said.

"If we are to change medicine in the near term, we're going to need the patients to demand this change," Conway said. "If we give new test data to a doctor and it affects his or her treatment decisions, then that's the proof of principle for the value of genomics technology."

Conway said the economics of health care must come into play as the company tries to transform the practice of medicine. "The health care system is not willing to pay for just great technology. It must improve outcomes at the same or at lower costs. By using pharmacogenomic tests patients will receive the proper drug. Outcomes should be much better, thereby reducing the costs," he said.

There will be a "paradigm shift" in diagnostic products, Toth said. "They'll go from low margin, low volume to high margin, high volume premium predictive tests. They will be driven by pharmacogenomics and Millennium will be a key player in the game."

According to Conway, "this is the second wave of value for the company."

Millennium's stock (NASDAQ:MLNM) closed Thursday at $80, up $2.75.