By Mary Welch
Rigel Inc. and Novartis Pharma AG signed a deal worth up to $100 million to collaborate on five research projects to identify targets using Rigel's functional genomics technology.
Rigel, a two-year-old company, signed its first revenue-generating deal in January, and since then has nabbed a total of three collaborations with multinational pharmaceutical companies it said are worth at least $200 million.
Rigel, based in South San Francisco, and Novartis agreed on two of the five projects. The first is focused on identifying targets that regulate T cells, which play a key role in the body's immune system, especially on the body's acceptance of newly transplanted organs. The second involves B cell activation. The other three projects will be jointly identified within the next 18 months.
"Each collaboration will last four to five years and all will be started within the next 18 months," said James Gower, president and CEO of Rigel. "We can't discuss many details, but it involves an up-front cash and equity investment. It is a fairly typical biotech deal, with a little more money up to preclinical."
Gower said the equity investment consists of "significant immediate funding," but the majority is callable by Rigel up through an initial pubic offering.
"All of our collaborations involve equity," he said, "and they're all about equal in terms of equity position."
Novartis, based in Basel, Switzerland, secured access to Rigel's technology and also will provide Rigel with research funding, milestone payments and certain royalty considerations to identify targets for drugs, including small molecule agents, vaccines and diagnostic products. Novartis will retain exclusive worldwide rights to develop and market products. The work will be done at both companies.
Rigel's technology can quickly probe the inner circuitry of diseased cells to find targets that control cell function and that can be specifically and safely modulated by orally administered drugs.
The company said it involves insertion of a different proprietary peptide probe into each of millions of diseased cells to see which probes hit a target that can cause the desired phenotypic change. Rigel said through use of ultra-high-throughput biological screening assays, it can study 100 million cells in a few hours to identify the probe/target combination that produces the desired effect on the disease process.
Privately held Rigel, which has nearly 70 employees, will not staff up as a result of this part of the collaboration, but may as the other three targets are identified and under way.
Rigel's first major deal, worth at least $20 million, was with Janssen Pharmaceutica NV, of Beerse, Belgium - a Johnson & Johnson company - to identify new drug targets that control the progression of colon and breast cancer. The second, with Pfizer Inc., of New York, is to discover human and veterinary drugs for asthma and allergy based on IgE regulation in B cells. (See BioWorld Today, Jan. 15, 1999, p. 1.)