By Mary Welch

Scoring its second major deal with Japan Tobacco in less than two years, Gene Logic Inc. forged a 44-month alliance that calls for a minimum of $12 million in committed payments, and up to $17 million in milestone payments for each product resulting from the collaboration.

"There is no limitation on the number of targets we discover," said Steve Push, vice president of corporate communications for Gaithersburg, Md.-based Gene Logic, which will use its Restriction Enzyme Analysis of Differentially Expressed Sequences (READS) gene expression and bioinformatics technologies to identify drug targets for an undisclosed therapeutic area.

"The way the deal works is that if we discover a target and Japan Tobacco takes it from there, all the way to FDA approval, we get $12 million," Push said. "If we discover a target and, using our own technology, help take it through the FDA process to approval, we get $17 million in milestones."

READS captures and analyzes the overall gene expression profile of a given cell or tissue type to identify drug targets. Using the technology, Gene Logic rapidly generates a gene expression profile, representing a quantitative and accurate "snapshot" of the levels of expression of essentially all the genes expressed in a tissue sample. The company then compares normal and diseased tissues through a series of snapshots.

In total, Gene Logic will receive approximately $7 million per year in guaranteed revenues from its Osaka, Japan-based collaborator. About half of that amount will come from the most recent deal, with the rest resulting from its five-year, $100 million deal with Japan Tobacco signed in September 1997 to discover drug targets and leads for the treatment of renal disease. (See BioWorld Today, Sept. 10, 1997 p. 1.)

Since first entering the partnership, Gene Logic has used READS to build a database of genes differentially expressed between normal kidney tissue and tissue from patients with glomerulonephritis, a form of kidney disease.

"We have discovered a number of full-length genes that look promising, and we will turn these targets over to Japan Tobacco," which will use assays to validate the targets, Push said. No milestones from the first collaboration have been paid, but Push said they could be paid this year.

Gene Logic's stock (NASDAQ:GLGC) closed Monday at $7.375, up $0.406. n