By Randall Osborne

Two large pharmaceutical companies stepped further into the genomics arena in separate ventures, with Novartis AG committing $250 million to a new research institute and Bristol-Myers Squibb Co. chalking up its eighth genomics collaboration by licensing technology from Acacia Biosciences Inc.

Basel, Switzerland-based Novartis said it is establishing the Novartis Institute for Functional Genomics to conduct research with external partners such as The Scripps Research Institute, of La Jolla, Calif., which is adjacent to the site for the Novartis Institute. Construction is expected to begin on the 20-lab facility later this year, with completion in 1999.

Novartis already has genomics collaborations with Myriad Genetics Inc., of Salt Lake City, and Incyte Pharmaceuticals Inc., of Palo Alto, Calif., said Paul Herrling, head of research for Novartis' pharmaceutical division.

"But they are on the side of gene finding," he said." The bottleneck is not going to be on gene finding. We have a lot more genes than we can work on. We need to know why a particular gene modification leads to disease, and this [institute] is on the side of gene function."

The Novartis group was formed two years ago through a merger with strong genomic elements. When Swiss drug makers Ciba-Geigy Ltd. and Sandoz Ltd. joined in 1996 to create Novartis, Sandoz had partnerships with the Stanford University Human Genome Center in Palo Alto, Calif., and the Whitehead Institute for Genome Research at the Massachusetts Institute of Technology, in Cambridge, Mass.

Scripps In Second Alliance With Drug Maker

About four years before the merger, Sandoz had signed — and then scrapped — a $300 million research agreement with Scripps, which receives funding from the National Institutes of Health (NIH). The deal, under which Scripps would have sold 10 years worth of future research to Sandoz, touched off a debate about conflicts of interest in collaborations by NIH grant recipients with private firms.

An amended partnership was established and is separate from the relationship of Novartis' new institute with Scripps, its neighbor.

Herrling said a relationship between Novartis and Scripps was begun in January 1997.

"We're already spending more than the specific funding foreseen in the agreement," Herrling said, "and we have a number of compounds that came from [Scripps'] chemistry."

Last year, Novartis group sales totaled $20.4 billion.

In a separate genomics foray, New York-based Bristol-Myers Squibb licensed the use of the Genome Reporter Matrix (GRM) from Acacia Biosciences Inc., of Richmond, Calif., for undisclosed terms.

GRM determines chemical response profiles, which measure the change in gene expression caused by potential therapeutics by identifying genes that have altered expressions and ranking them by degree of response.

It also creates genetic response profiles, measuring changes in gene expression caused by mutations in the genes encoding potential targets.

"We look at the whole genome simultaneously," said Bruce Cohen, president and CEO of Acacia. "We compare the pattern [gained from profiling] as a pattern against other chemical stimuli, and reduce it to a score, a single number. Without having to go through 6,000 genes, you can say, 'I'd rather look at this chemical, or this class of chemicals.'"

GRM takes snapshots of the pattern over time. "We call them molecular movies," Cohen said.

The genomics trend among pharmaceutical companies began in a big way in May 1993, when SmithKline Beecham plc, of London, entered a $125 million genomics agreement with Rockville, Md.-based Human Genome Sciences Inc. (HGS), which went public seven months later. (See BioWorld Today, Nov. 15, 1993, p. 2.)

HGS was the second genomics firm to go public, following Incyte, which priced its initial public offering earlier the same year. (See BioWorld Today, Nov. 16, 1993, p. 1.)

"The industry is probably toward the end of the initial wave of enthusiasm for looking at specific genes," Cohen said. "[Acacia] is sufficiently novel that I wouldn't put us at the end of the bandwagon."

Bristol-Myers Forms In-House Genomics Unit

Last April, Bristol-Myers formed a corporate consortium with Affymetrix Inc., of Santa Clara, Calif., and Millennium Pharmaceuticals Inc., of Cambridge, Mass., to fund a five-year research program in functional genomics at the Massachusetts Institute of Technology's Whitehead Institute for Biomedical Research.

The consortium will provide about $8 million per year for the term of the agreement, with the genome center given access to Affymetrix's and Millennium's technologies for the purpose of developing new genomic tools.

In return, the companies get licensing rights to any developments funded by the consortium or emerging from use of the technology.

Also last April, Bristol-Myers established its Department of Applied Genomics to develop gene-based technologies for research and health care. More than 60 researchers were assigned to the department. Part of its strategy is to increase Bristol-Myers' access to genomics data.

Last March, Bristol-Myers became a subscriber to Incyte's core databases containing DNA sequences for human genes. Other Bristol-Myers collaborators include Genome Therapeutics Corp., of Waltham, Mass., and SEQ Ltd., of Princeton, N.J. *