LONDON ¿ Cambridge Antibody Technology (CAT) Group plc has signed a US$70 million deal with Wyeth-Ayerst Laboratories, a division of Madison, N.J.-based American Home Products, to apply CAT¿s functional genomics and human-antibody engineering expertise to the discovery and development of therapeutics based on targets identified by Wyeth.

David Chiswell, CEO of CAT, told BioWorld International the deal will prove the worthiness of ¿both legs of the business strategy, providing short- and medium-term revenue, as well as helping to fuel our antibody product pipeline. It is a major endorsement of the capabilities we have established in functional genomics over the past two years, and of our antibody engineering expertise.¿

Wyeth will pay CAT, based in Royston, Cambridgeshire, US$4 million annually for up to four years to apply its ProAb and ProxiMol functional genomics technologies to potential protein targets, based on gene sequence information provided by Wyeth. CAT¿s bioinformatics software will be installed at Wyeth¿s U.S. laboratories to enable data supplied by CAT to be analyzed. Wyeth has the option to develop antibody products derived from this research; if it does so, CAT will be entitled to license fees, milestones and royalties.

The two will also share the costs of validating and developing antibody-based product candidates directed at novel proprietary Wyeth targets and targets contributed by CAT. Each company will then have the option to select candidates for further development from this shared portfolio. Each will pay the other license fees, milestones and royalties on each product, and in addition Wyeth will have first refusal to partner candidates selected by CAT after Phase II.

Wyeth has also taken an option to license CAT¿s phage library, with associated development options.

Although he could not say exactly how the $70 million headline figure would be made up, Chiswell said the $4 million per annum over four years was guaranteed.

¿If Wyeth then chose to take a license they will pay more cash, if they then take up product options it will bring in more cash and milestones,¿ he said. While the total value of the deal could go over $70 million, Chiswell said, ¿I¿ll be disappointed if we only get $4 million a year from it.¿

This is CAT¿s biggest agreement to date. ¿The beauty of it is that it impinges on all aspects of the business strategy,¿ Chiswell said. ¿ We won¿t get any other deals as broad as this, but we hope it will act as a model for other deals.¿

CAT also disclosed an extension to its collaboration with BASF Research Corporation of Worcester, Mass., part of BASF Pharma, under which BASF may select up to six target antigens, against which CAT will develop antibodies. CAT has previously developed fully human antibodies against two BASF targets, and is working on another. The most advanced, D2E7, a fully human antitumor necrosis factor for the treatment of rheumatoid arthritis, completed Phase I/IIa trials in November 1998.

The patent position of CAT¿s fully human antibody technology has been significantly strengthened with the granting of a U.S. patent covering the isolation of human antibodies against all human proteins, except for those that generate natural antibodies in humans.

¿We have not previously had a broad U.S. patent granted,¿ Chiswell said. ¿This broadly covers all our platform technologies.¿ CAT is in dispute with the German antibody company, Morphosys AG, of Munich. CAT claims that Morphosys has infringed on two of its patents relating to phage display of antibody fragments and gene expression libraries.

Chiswell said the granting of CAT¿s U.S. patent would have no impact on the action against Morphosys. ¿But it is something which any current or future partner of Morphosys would have to take into account,¿ he said.