By Mary Welch

PPD Inc. entered a potential $30 million, four-year deal with Rhone-Poulenc Rorer Inc. (RPR) to develop therapeutic agents in oncology, inflammation, cardiovascular disease and central nervous system disorders.

"The genomics revolution continues to generate almost overwhelming lists of potential targets for drug discovery," said Mark Furth, chief scientific officer of PPD Discovery, of Morrisville, N.C., a wholly owned subsidiary of Wilmington, N.C.-based PPD, whose acronym stands for Pharmaceutical Product Development.

PPD Discovery will search for targets using PPD's GSX system, which isolates functional inhibitors, called Genetic Suppressor Elements (GSEs), of any gene responsible for a disease pathway. GSEs are small gene fragments that, when expressed in cells, inhibit the production or activity of the corresponding target protein.

From libraries of random gene fragments, investigators select those GSEs that cause desired changes in predictive disease models. For some indications, GSEs might be delivered as gene therapy medicines; more generally, they might be used for identification and validation of targets for drug discovery.

"Internally, as well as working within RPR, we will use the GSX approach toward genetic selection in order to validate candidate genes for drug discovery as well as novel targets," Furth said.

The deal promises PPD a range of $20 million to more than $30 million, if targets in two of the four therapeutic areas are identified or validated. In addition, significant royalty payments come into play on approved products, as well as research and development milestone payments.

Under the agreement, Collegeville, Pa.-based RPR, a division of Rhone-Poulenc SA, of Paris, will commit funding for scientists from both companies to develop cellular models and to select GSEs. RPR will begin drug discovery based on human gene targets identified through the collaboration and will have worldwide rights to any subsequent therapeutic products.

Both Companies Have Product Development Rights

PPD will have worldwide rights to commercialize products for diagnostics applications, including pharmacogenomics, and may develop therapeutic products against targets that RPR opts not to pursue. However, RPR has the first option to license such products, as well as the right to use the diagnostic and pharmacogenomics products to develop its own products.

RPR will receive development milestone payments and royalties on PPD products, and obtains a non-exclusive license from PPD to use GSX technology for the research program. PPD may enter additional collaborations in the same disease areas.

PPD Discovery, with about 30 employees, was formed through the 1997 acquisitions of Research Triangle Park, N.C.,-based Sarco Inc., and the GSX technology system from Ingenex Inc., of Menlo Park, Calif. Sarco provides combinatorial chemistry expertise with services for finding and optimizing novel lead drugs.

The company is one of six subsidiaries of PPD Inc. and is designed to help clients move "from the bench to post-market," said Fred Eshelman, CEO. "We're seamless. We started out as a traditional contract research organization, and evolved into a worldwide company with research and development services, from target validation to conducting Phase I to Phase IV trials."

Furth said he believes the company's role will be to further help companies plow through the genomics information glut.

"The future problem of research will be that there are a large number of potential targets and high-throughput screening of lead compounds, resulting in bottlenecks," he said. "Companies must be able to focus on a lead compound and move it quickly through the process. With our integration, it leads to a more informed situation."

The agreement with RPR was disclosed last week. PPD Inc.'s stock (NASDAQ:PPDI) closed Monday at $27.187, down $0.437. *