By Mary Welch

Myriad Genetics Inc. signed a five-year collaboration with Schering AG worth up to $51 million, with $20 million up front and an option to become an equal partner in the sale of any new drugs developed with ProNet, Myriad's protein interaction technology.

The agreement calls for Berlin-based Schering to utilize ProNet for drug discovery and development, and gives Myriad the option to co-promote in North America all new therapeutic products originating from ProNet.

Myriad gets 50 percent of the profits from the drugs' sales or may opt for a royalty that would be in the "high single-digit percentage," said William Hockett, spokesman for Salt Lake City-based Myriad.

"This may be the first [deal] of its kind where a large pharmaceutical company and a biotech firm agree to a profit-sharing on a 50-50 basis," Hockett said.

Under the terms of the agreement, Myriad will have access to all trial data related to a specific drug developed with ProNet and submitted as part of the new drug application (NDA). If the company chooses to become a marketing partner and share profits equally, half of the drug development costs will be shared by Myriad.

"There is a four-month window following the NDA submission to decide," Hockett said. "This lowers the risks to Myriad of developing pharmaceuticals, and increases the probability of co-promoting only the most promising drugs. Our goal, 10 to 15 years from now, is that half of all profits of Schering drug sales in North America will go to Myriad. That is the potential of this deal."

Up front, Schering will pay about $20 million in research and licensing fees. The remaining $31 million would come as milestone payments.

ProNet is a database of human proteins and the proteins with which they interact, along with the biochemical pathways. Using it, Schering and Myriad scientists will work together via the Internet. Initially, their collaboration will focus on cardiovascular and autoimmune diseases, as well as cancer.

Eventually, Myriad expects ProNet — which the company said is uniquely configured to identify proteins and link them into biochemical pathways — to contain all of the protein interactions in the human genome, representing the 80,000 to 100,000 human genes.

"Essentially, ProNet is a way to find quality drug targets among masses of genomic data," Hockett said. "We can get a good look at disease pathways of the surrounding genes and find the best gene in the pathway to attack with a drug."

Last year, Bayer Corp., of Pittsburgh, agreed to pay up to $54 million to access ProNet in its search for gene targets to treat dementia and depression. Bayer is the U.S. subsidiary of Bayer AG, of Leverkusen, Germany. The two companies also hooked up in 1995 to discover genes for obesity, osteoporosis and asthma. (See BioWorld Today, Nov. 21, 1997, p. 1, and Sept. 13, 1995, p. 1.)

Myriad's stock (NASDAQ:MYGN) closed Tuesday at $11.375, up $1.50. *