By Mary Welch

Cadus Pharmaceutical Corp. cut 23 positions in a restructuring effort, largely due to the ending of a five-year collaboration with Bristol-Myers Squibb Co.

Cadus, of Tarrytown, N.Y., now has 84 full-time employees, 66 of whom are in research and development.

¿This restructuring will reduce our operating expenses and should strengthen the company,¿ said Jim Riley, vice president of finance. ¿We don¿t want to say how much we¿ll be saving or what our burn rate will be.¿

Bristol-Myers Squibb (BMS), of New York, and Cadus started a three-year partnership worth up to $45 million in July 1994 that used Cadus¿ yeast-based screening technologies and focused primarily on the discovery of drugs directed at G protein-coupled receptors (GPCRs) and their related cell-signaling pathways.

The partnership was focusing its drug-discovery efforts on a broad range of diseases, such as central nervous system and cardiovascular disorders. In January 1997, BMS paid $10 million to exercise its option and extended the collaboration for two years, which means it will end this July. At the time of the extension, BMS had paid more than $30 million in equity and research payments to Cadus.

As part of the deal, BMS provided at least $4 million in research funding per year, adjusted for inflation; however, that number is only $1.3 million for 1999. Initially, BMS made an equity purchase that represented 15 percent of Cadus; today it owns about 17 percent. (See BioWorld Today, Jan. 9, 1997, p. 1.)

Riley refused to elaborate about the collaboration, referring all questions to BMS. ¿We have delivered compounds to them. Other than that, we can¿t comment,¿ he said.

Bill Dunnett, associate director for public affairs at BMS, said the collaboration has ¿run its natural course. There is nothing in our pipeline that I can point to as a direct result of the collaboration.¿

GPCRs regulate the physiologic behavior of the cell by blocking or transmitting signals from outside the cell ¿ through G proteins ¿ to the cell¿s interior. G proteins are found in the inner surface of the membrane of almost all cells, and more than 1,000 types of G protein-coupled receptors have been identified. Some of those receptors play a role or are suspected of playing one in a number of diseases, such as Alzheimer¿s disease, rheumatoid arthritis, hypertension, atherosclerosis and some cancers.

Cadus developed a method to simplify the testing of compounds against protein signaling pathways, which involves transferring the genes for a single human receptor complex into yeast cells. Such yeast cells contain human G protein-coupled receptors that act as if they were in human cells. Cadus has constructed a series of such yeast strains that can be used in a high-throughput screening system to test thousands of compounds a day.

At the time of the 1997 extension, Cadus had genetic sequences for a potential 400 G protein-coupled receptors, and the expansion gave BMS access to several more than the few receptors involved in the original deal. In addition, the expansion gave BMS some other molecular targets downstream from the receptors along the signaling pathway inside cells.

Cadus does have other collaborations. The largest of these is with SmithKline Beecham plc, of London, and worth about $68 million. A deal with the Solvay Group, of Brussels, Belgium, is worth about $50 million. Cadus also has several internal drug discovery programs under way in the areas of asthma, glaucoma, allergy and small-cell lung carcinoma (See BioWorld Today, Feb. 28, 1997, p.1.)

Cadus¿ stock (NASDAQ:KDUS) closed unchanged Tuesday at 87.5 cents.

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