By Randall Osborne

Genentech Inc. has signed a deal worth up to $55 million with CuraGen Corp., the second major genomics pact made in less than a month by CuraGen and the second major development for Genentech in less than a week.

As it completed the agreement with CuraGen, of New Haven, Conn., South San Francisco-based Genentech said positive Phase II trial results with its human growth hormone have led the company to plan a pivotal Phase III study of the product, delivered through technology known as ProLease, in children with deficiencies.

Under the terms of the CuraGen deal, Genentech will buy up to $5 million worth of CuraGen stock and provide a $26 million line of credit. After the end of the first year, the drawn-down portion of the credit line is convertible at CuraGen's option into CuraGen stock at the fair market price.

Genentech will provide up to $24 million in funding over five years if the collaboration and database subscription are not terminated by Genentech, which will have access to CuraGen's genomics platform.

The platform includes the GeneCalling system for gene expression analysis and gene discovery; the PathCalling system for discovering the roles of genes and the proteins they encode in biological pathways; and the GeneScape bioinformatics operations system of Web-based project management, data analysis and visualization.

Systems Generate Data Sets

Disease systems specified by Genentech will generate data sets through the GeneCalling and PathCalling systems. The deal between CuraGen and Genentech will cover "a range of disease programs," according to CuraGen.

Under the terms of the deal, Genentech gets exclusive right, during specified periods, to evaluate discoveries made and to license them for an additional fee. When the exclusivity period is over, the rights to unlicensed genes and to the data revert to CuraGen, for inclusion in the databases. Genentech will pay milestones and royalties for each product developed under a license.

CuraGen, which registered for an initial public offering in October, signed a similar genomics deal with Biogen Inc., of Cambridge, Mass., earlier this month and was restricted from commenting further on the Genentech pact by "quiet period" rules related to the filing. (See BioWorld Today, Oct. 20, 1997, p. 1, and Nov. 12, 1997, p 1.)

Genentech's sustained-release human growth hormone is administered using an injectable delivery system called ProLease, which was developed by Alkermes Inc., of Cambridge, Mass. The hormone, encapsulated in biodegradable microspheres, is released over a period of weeks.

The collaboration between Genentech and Alkermes began in January 1995 and was expanded a year ago. Their partnership followed completion of a Phase I trial evaluating ProLease in delivering growth hormone to 13 adults deficient in the protein. ProLease was designed to reduce the frequency of growth hormone treatments. (See BioWorld Today, Nov. 15, 1996, p. 1.)

Growth hormone deficiency is a pituitary disorder that afflicts about 20,000 children in the U.S., causing short stature and physical ailments.

"Results from the Phase II trial that we have now are preliminary, but we have plans to initiate the Phase III trial by early 1998," said Betsy Rosenberg, spokeswoman for Genentech. The Phase III trial will enroll 70 patients at 25 to 30 sites in the U.S., and its primary endpoint will be dosing regimen, she added.

In the Phase II trial, subcutaneous injections of ProLease human growth hormone have been administered to 64 patients at 12 sites. Full data from the Phase II trial will be presented sometime next year, Rosenberg said.

Genentech's stock (NASDAQ:GNE) closed Monday at $58.312, unchanged. Alkermes' stock (NASDAQ:ALKS) closed at $19.625, down $0.625. *

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