By Debbie Strickland

The U.S. Defense Department agency that fostered development of the Internet and the Stealth bomber has awarded Genelabs Technologies Inc. a three-year, $13.6 million grant to create a database to enable the rapid design of drugs to counter pathogens employed in biological warfare.

That such a database could also be used for traditional drug discovery purposes is a potentially lucrative bonus for the Redwood City, Calif., company, which will own technology developed under the grant.

"We hope to have molecules targeted to specific model systems by the end of this year," said Debra Bannister, vice president for corporate communications.

The funding comes from the Defense Advanced Research Projects Agency (DARPA), created in 1958 to identify ideas and technologies with applications to military problems. Genelabs' grant amounts to more than a third of the $30 million planned for the three-year Unconventional Pathogen Countermeasures Program.

With $3.8 million coming in 1998, the grant "essentially doubles our contract revenue for the year," noted Bannister.

Genelabs will use two existing assay systems, Merlin and Viria, to screen combinatorial chemistry libraries for molecules — and, more importantly, subunits of molecules — that bind to segments of genetic material as small as four base pairs. The database will archive the subunits and the tiny genetic segments they disable.

To disarm a specific bacteria or virus, researchers will link a series of subunits together to bind to a long sequence of DNA or RNA.

"We can determine the sequence preferences of the subunits and use them in a mix and match fashion to target any gene," said Cynthia Edwards, vice president of research. "We see ourselves as the enabling link between the genomics industry and the combinatorial chemistry industry."

Building Compound Database Is First Step

The biological warfare defense project initially will focus on building the database, with targets to be identified later. Edwards and Thomas Bruice, who will direct the chemistry work, will act as co-principal investigators for the program, which likely will include industry and academic collaborators.

Genelabs said its researchers will not work directly with the biological agents. Testing likely will be done in collaboration with government or other institutional laboratories capable of handling infectious agents.

The funding allows Genelabs to buy access to other companies' structure-directed combinatorial chemistry libraries and to build its own internal chemistry capabilities.

The molecule libraries will pay a visit to Merlin, a patented high-throughput assay system designed to identify and characterize molecules and subunits that bind to DNA. A sister system, Viria, will screen for binders of double-stranded RNA.

Merlin has been around long enough to earn a number of patents, but Viria was developed just in the last year — in part to bolster Genelabs' grant application.

"The Viria technology was developed in response to folks from DARPA who came by about a year ago and expressed concern about RNA viruses," said Edwards.

Like the database it will help create, Viria has obvious commercial applications, and the company is using the system now as the cornerstone of a new antivirals program whose key targets are influenza and hepatitis C viruses.

Genelabs' shares (NASDAQ:GNLB) closed Wednesday at $4, up $0.062. *

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