PARIS - The French drug-discovery company Cerep S.A. and Bristol-Myers Squibb Co. entered into a strategic collaboration consisting of three separate elements that could be worth more than $43 million to Cerep.
In the deal BMS will subscribe to Cerep's proprietary database, BioPrint; the two companies will undertake a joint drug-discovery program; and BMS' wholly-owned French subsidiary, UPSA, will transfer a large part of its drug-development activities to Cerep.
The total value to Cerep of this collaboration, taking account of BMS' subscription to BioPrint, research and development funding and potential milestone payments, could exceed $43 million. In addition, BMS is to acquire an equity stake of $3 million in the French company, which also would receive royalties on any products resulting from their discovery collaboration.
The agreement is for five years, although BMS has the option of terminating it after three years. According to Cerep's chief financial officer, John Dwyer, the final contracts should be signed within two or three months, once the necessary procedural formalities have been completed. BMS will acquire its equity stake at the market price; at the current price, it represents a holding of around 8 percent, according to Dwyer.
Dwyer told BioWorld International that what primarily attracted BMS to Cerep was BioPrint, and that the other components of the collaboration followed on from that. The BioPrint Database consists of data sets for individual molecules covering their chemical structure, in vitro test results and in vivo properties, and is the product of Cerep's high-throughput pharmacological and pharmaceutical profiling activities. Included in the database, which continues to grow rapidly, are data on marketed drugs, subscriber reference compounds, and compounds that are proprietary to BioPrint subscribers.
BMS will have non-exclusive access to both the BioPrint Database and BioPrint Tools, software that enables large series of data to be analyzed and visualized. Cerep will carry out high-throughput profiling of BMS compounds that are at the lead-development stage, and the U.S. company will use the resulting proprietary data sets in combination with BioPrint. In addition, Cerep and BMS are to develop and share new technologies in the area of miniaturized assays for compound profiling.
Their joint drug-discovery program, which will receive R&D funding of $5 million a year over five years, will focus on three targets that are specified in the collaboration agreement but are being kept confidential for the time being, Dwyer said. Cerep will draw on its full range of technologies - including molecular modeling, library design and synthesis, high-throughput screening and profiling, and compound optimization - for the preclinical development of these targets, while BMS will be responsible for their clinical development. Cerep will receive milestone payments at key stages in compound development, as well as royalties if and when the drugs reach the market.
The third element in the collaboration, the transfer to Cerep of a substantial part of UPSA's drug-discovery department, will help Cerep accelerate the development of its medicinal chemistry and animal pharmacology capabilities for the benefit of both BMS and other partners. Cerep is taking over UPSA's research center in the Paris suburb of Rueil-Malmaison, while the UPSA R&D activities not being pooled with Cerep, particularly in its specialty area of pain management, are to be transferred to the BMS Pharmaceutical Research Institute in the U.S.
CFO Dwyer stressed the high value of this agreement to Cerep and the fact that its partner is a top U.S. pharmaceutical company. He expects more companies to subscribe to the BioPrint Database, which he describes as a "highly profitable" activity, and forecasts that Cerep will break even in 2000 and turn a profit in 2001.