By Mary Welch

In a $20 million-plus deal, Axys Pharmaceuticals Inc. will provide Parke-Davis Pharmaceutical Research with a generic compound screening library consisting of multiple small-molecule organic compounds created by Axys' combinatorial chemistry technologies.

In addition, the three-year agreement calls for South San Francisco, Calif.-based Axys to provide Parke-Davis, of Ann Arbor, Mich., with the technologies and synthetic protocols to reproduce the library, as well as to make other compound libraries. Parke-Davis is a division of Warner-Lambert Co., of Morris Plains, N.J.

"This is a product deal, and it is an enabling deal that will allow Parke-Davis to re-create those libraries or analogs," said John Walker, Axys' chairman and CEO. "We're very pleased with this because we had set up our advanced technology division earlier in the year with the intent that it would contribute new revenue and positive earnings to the overall company. And it looks as if that strategy is being executed successfully. It's a very nice arrangement."

Parke-Davis is paying a fee of more than $20 million for the initial compound libraries and the enabling technology to create more.

Axys is selling its new partner a "robust set of synthetic protocols and compounds as a package for each library," said Mike Venuti, senior vice president of research. "When they get a hit, they can make new compounds in their own shop based on what we've provided to them. It's a pragmatic approach and a different way from how many other companies use their combinatorial chemistry."

Essentially, Axys allows Parke-Davis the means to use the Axys compound library as easily as its own chemical library, so it can quickly retrieve an interesting compound and optimize analogs to produce a drug.

The compounds are designed to have "drug-like" characteristics, taking into account molecular weight, solubility and membrane permeability. "That gives a company the best chance from the start to find valuable drug leads," Mike said.

Parke-Davis will be using the libraries on an unrestricted basis for a variety of drug discovery purposes, although its focus traditionally has been on heart disease, diabetes, infectious diseases, diseases of the central nervous system and women's health.

Axys was formed in January after the $166 million merger of South San Francisco-based Arris Pharmaceuticals Inc. with Sequana Therapeutics Inc., of La Jolla, Calif. (See BioWorld Today. Nov. 4, 1997, p. 1.)

Axys' stock (NASDAQ: AXPH) closed Thursday at $7, up $0.125. *