By Randall Osborne

To strengthen its database of small molecule, double-stranded nucleic acid-binding compounds, Genelabs Technologies Inc. has teamed up with three firms providing combinatorial chemistry: MDS Panlabs; SRI International; and Tripos Inc.

Genelabs, of Redwood City, Calif., focuses on discovering small molecule drugs that act by binding to DNA or RNA to regulate gene expression or inactivate pathogens. By using the three companies' libraries, Genelabs plans to design molecules with the optimal size, shape and molecular qualities.

Tripos, of St. Louis, will design compounds using its molecular modeling techniques, and MDS, of Bothell, Wash., will synthesize them in solution.

SRI, of Menlo Park, Calif., will work independently, using the solid phase combinatorial synthetic methods to make molecules to Genelab's specifications.

"We'll end up with two different sets of molecules to screen," said Debra Bannister, spokesperson for Genelabs.

"We don't call it a collaboration, because it's not," Bannister said. "We contracted for the services. Obviously, we pay for the services, but then we own the molecules. There are no continuing rights on [the other companies'] parts."

The services purchase was helped along by Genelabs' three-year, $13 million grant from the U.S. Defense Department to create a database enabling the rapid design of drugs against biological-warfare pathogens. (See BioWorld Today, Feb. 12, 1998, p. 1.)

"Funding we're getting from the [defense] contract is allowing us to access these services sooner," Bannister said.

Those services, in turn, will help improve the database, which will be used for purposes specified in the defense department deal and will have other applications, she said.

What's more, the new molecules made by the three companies "are the same molecules that can be used in a mix-and-match fashion in our collaboration with Dupont Merck [Pharmaceutical Co.]," Bannister said.

The 1996 deal with Dupont Merck to develop small molecule, gene-regulating drugs could mean as much as $20 million per marketed drug for Genelabs. (See BioWorld Today, Dec. 19, 1996, p. 1.)

Those molecules may also be used in Genelab's own development of products. Genelabs' platform technology, known as Merlin, is used to screen for DNA-binding sequence preferences of small molecules that are effective is displacing regulatory proteins from DNA. Its sister technology for antiviral drugs, called Viria, is designed to discover molecules that bind to double-stranded RNA.

Last November, Genelabs reported mixed results from a Phase III trial of its lead compound, GL701, based on the natural hormone dehydroepiandosterone, of which lupus patients typically show lower than normal levels. Those data have been used to fine-tune an ongoing, second trial. (See BioWorld Today, Nov. 13, 1997, p. 1.)

Genelabs' stock (NASDAQ:GNLB) closed Tuesday at $4.125, down $0.125. *

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