By Randall Osborne

Scriptgen Inc. turned over a set of antibacterial compounds to DuPont Pharmaceuticals Co. and agreed to help develop new ones, as part of a deal worth up to $53 million.

"That represents the minimum," said Michael Palfreyman, senior vice president of research and development for Waltham, Mass.-based Scriptgen. "It's a robust program."

Under the terms of the agreement, Scriptgen has transferred to DuPont, of Wilmington, Del., a family of antibacterial compounds already developed, and will use its three core technologies to identify new ones.

DuPont will pay Scriptgen $8 million in the form of an up-front payment and a stock purchase when Scriptgen goes public. The payment is "a mixture of stock and cash," Palfreyman said, declining to be more specific.

Scriptgen also gets research and milestone payments. Assuming two successful products, the deal could be worth more than $53 million, not including royalties, to which Scriptgen also is entitled.

"It's a multiyear agreement, with several possible extensions built in," Palfreyman said.

Together, the companies will exploit Scriptgen's three core technologies. The first, Genetics Assisted Target Evaluation (GATE), measures the effects of transiently removing a specific gene from a cell. By creating conditions similar to a drug's mechanism of action, the system predicts target behavior.

The second and third tools - Any Target Ligand Affinity Screen (ATLAS) and the Screen for Compounds with Affinity for Nucleic Acids (SCAN) - measure the affinity of compounds that bind to targets even before the gene functions are well understood, so researchers can deal with targets unsuitable for commonly used high-throughput screens.

Palfreyman described the deal as "soup to nuts. We identify targets, set up screens and may be involved in early chemistry." Other types of partnerships provide enabling technology, or a lead molecule to be developed.

Scriptgen's collaborators include BioChem Pharma, of Laval, Quebec; Eli Lilly and Co, of Indianapolis; Hoechst Marion Roussel AG, of Frankfurt, Germany; Hoffman-La Roche Inc., of Nutley, N.J. (a subsidiary of Basel, Switzerland-based Roche Holding Ltd.); and Incyte Pharmaceuticals Inc., of Palo Alto, Calif.

Palfreyman said partnerships are given "slightly more" of the company's attention than its internal antifungal programs.

"As we evolve, more of our research effort will go to the internal programs, but we continue to look forward to more collaborations with pharmaceutical companies," he said. "And they continue to approach us."

Scriptgen withdrew its initial public offering last year, after filing in 1997 to seek about $45 million. Last month, the company raised $12 million in a stock placement. (See BioWorld Today, Nov. 24, 1997, p. 1, and Dec. 17, 1998, p. 1.) *