By Mary Welch

In a deal worth up to $64 million plus royalties, Pharmacopeia Inc. agreed to screen its multimillion-compound sample collection of diverse, small molecules against targets chosen by Schering AG, Berlin. In addition to research and development payments, plus milestones, Pharmacopeia is entitled to royalties on products developed from the collaboration with Schering.

"We have a deal with Berlex, which is an affiliate of Schering AG," said Sue Rodney, manager of investor relations for Princeton, N.J.-based Pharmacopeia. "That program, which is in the field of inflammation and its effect on multiple sclerosis, is more of a traditional drug discovery collaboration, where we design and screen compounds and hand the lead compound over." She said the newest agreement "is a little different -- we will focus on our high-throughput screening expertise to screen a number of targets given to us by Schering and then either company can perform chemical optimization of active compounds."

Pharmacopeia currently has in-house about 2.5 million compounds against which to screen targets using high-throughput screening, Rodney said. However, the company has generated more than 4.2 million diverse, small molecules. These compounds are attached to microscopic beads. To identify a compound's structure on one of these beads, researchers use a set of inert chemical tags that encode the series of chemical reactions each bead has experienced. The tags are then read and the active ingredient is synthesized on a larger scale for additional testing.

The companies would not disclose how many targets per year could be screened; nor for which indications of interest to Schering.

The 1995 collaboration with Berlex Laboratories Inc., of Richmond, Calif., called for Pharmacopeia to receive about $19 million, plus potential royalties. In that alliance, Berlex had identified an enzyme system believed to be important in multiple sclerosis and Pharmacopeia was going to search for compounds that would interact and interfere in the system. (See BioWorld Today, Feb. 16, 1995.)

"That collaboration has been very successful," said Rodney. "One milestone payment has been paid and a compound identified by us is moving toward formal clinical development. We also received additional funding from Berlex this August to pursue chemical optimization on an additional lead compound -- a second inflammation target -- identified by us."

Pharmacopeia's stock (NASDAQ:PCOP) closed Tuesday at $10, up $0.125. *