By Randall Osborne
Aurora Biosciences Corp. has signed its fourth and largest research and licensing deal, adding a potential $100 million agreement with Merck & Co. Inc. to pacts made with other collaborators to develop Aurora's assay and screening technology.
Over the next several years, $33 million of committed funds will be paid by Merck, of Whitehouse Station, N.J., in research funding, license fees and delivery payments. If Merck opts for San Diego-based Aurora to supplement or expand the technologies offered, the deal could be worth up to $100 million.
"We're about six months ahead of our goals," said Timothy Rink, chairman, president and CEO of Aurora. "We are where we set out to be, to have a comfort zone in which we can meet our financial plans."
Under terms of the agreement, Merck gets access to Aurora's fluorescent assay technologies, along with what Aurora calls its "ultra" high-throughput screening systems (UHTSS) and screen development and screening services.
Rink said Aurora had planned to establish its syndicate of collaborators in the year following its initial public offering, which raised $40 million in June. The team is assembled to help Aurora further develop its drug discovery process using the UHTSS systems and technology. (See BioWorld Today, June 19, 1997, p. 1.)
Partnerships in the syndicate now include Bristol-Myers Squibb Co., of New York; Eli Lilly and Co., of Indianapolis; the Parke-Davis division of Warner Lambert Co., of Morris Plains, N.J.; and Merck. In September, Warner-Lambert agreed to pay up to $65 million plus royalties, with options that could increase its value. (See BioWorld Today, Sept. 24, 1997, p. 1.)
Syndicate May Include Six Partners
The Merck deal works much the same way, Rink said. "They can add what we call local systems in different therapeutic areas or at different sites," he said, adding that Aurora's fluorescent assay system "covers the majority of major classes of drug targets that companies, and certainly Merck, work on."
Aurora envisions a maximum of six partners, Rink said.
"These are technology and personnel-intense collaborations, and we have publicly stated that an optimal number would be four," Rink said. "That doesn't mean that if the next one came along under the right conditions and with the right company, we wouldn't go ahead, but it would not be until well into next year."
Combined with advances in genomics and combinatorial chemistry, Aurora's screening system and fluorescent assay technologies will help Merck and others with drug discovery, Rink said.
"That doesn't mean every screen they do is going to use our system, but our system can impact productivity in just about every area," he said.
The company's other collaborations include Roche Bioscience, a Palo Alto, Calif.-based subsidiary of Hoffman-La Roche AG, of Basel, Switzerland; Sequana Therapeutics Inc., of La Jolla, Calif.; and Allelix Pharmaceuticals Inc., of Mississauga, Ontario. Aurora provides these partners with screen development and screening services on a more focused, target-by-target basis.
Last year, Aurora teamed up with ArQule Inc., of Medford, Mass., to use Aurora's screening technologies against ArQule's small molecules. (See BioWorld Today, Sept. 24, 1996, p. 1.)
As of Sept. 30, Aurora had $45.6 million in cash, with a net loss of $1.5 million for the first nine months of the year. Aurora's stock (NASDAQ: ABSC) closed Thursday at $14.375, up $1.125. *