By Randall Osborne

Taking aim at gene targets for new drugs to treat dementia and depression, Myriad Genetics Inc. could get up to $54 million in its second collaboration with Bayer Corp.

Under terms of the five-year deal, Myriad, of Salt Lake City, will open its still-growing ProNet database to Pittsburgh-based Bayer, whose pharmaceutical division is the first to access the protein interaction database. Pittsburgh is the U.S. subsidiary of Bayer AG, of Leverkusen, Germany.

ProNet is being assembled with Myriad's high-throughput functional genomics system and is scheduled to include by next year more than 15,000 protein-to-protein interactions. Eventually, the company said, ProNet will contain information on all 80,000 to 100,000 human proteins, and their biochemical pathways.

"This is really a new direction for the company, another revenue-generating arm," said William Hockett, director of corporate communications for Myriad.

"We can screen tens of thousands of proteins in a year," Hockett said. "We'll start with the 5,000 or 6,000 known proteins." He said "several hundred" proteins already are in the database.

Myriad and Bayer collaborated in September 1995 to discover genes for obesity, osteoporosis and asthma. That deal, also for five years, was worth up to $71 million. (See BioWorld Today, Sept. 13, 1995, p. 1.)

That project has seen some success, and during the quarter ending Sept. 30, Myriad got $1.44 million in revenue from Bayer as part of it. "We have linkages to narrow chromosomal regions for each of the genes in the project," Hockett said. "Now we're analyzing candidate genes within those regions."

Two different hereditary obesity linkages have been found, and one each for asthma and osteoporosis. In the new deal with Bayer, scientists hope to find new drug targets for central nervous system disorders.

Dementia affects 6 million people in the U.S., and may become more of a problem as the population ages. Bayer already has developed metrifonate, a cholineasterase inhibitor for Alzheimer's disease. Phase III trials have been completed and a new drug application has been filed with the FDA.

Depression or a related disorder afflicts about one million people in the U.S., and those diagnosed cases are believed to represent only one-third to one-half of those with major depressive disorders.

Along with the ProNet database, Myriad has compiled data on Utah families to identify genes associated with major depression and bipolar disorder.

"A lot of it comes from public records," Hockett said. "We collect individuals in families that have a number of cases, and look for markers associated with them, trying to locate genes within the regions identified."

The deal's terms specify that Bayer gets worldwide therapeutic rights for discoveries in dementia and depression. Royalties for Myriad are in the "low double-to-high single-digit range," Hockett said. Myriad retains diagnostic rights and keeps all rights to discoveries outside the fields of dementia and depression.

Companies that subscribe to the database pay a yearly fee for nonexclusive access, and an option fee if the company identifies an area, such as a particular disease pathway, on which it wants an exclusive option.

Eric Schmidt, an analyst with UBS Securities, of New York, estimated the subscriber cost at $2 million to $3 million per year.

Success Depends On Multiple Subscribers

The Bayer deal is "a great validation," Schmidt said, "but it really gets rolling when a second and third partner sign up. [Myriad] has led us to believe they could sign up another one or two subscribers."

Schmidt said Myriad, with expertise in gene mapping, had been mulling its venture into database subscriptions for some time. "Frankly, I've always wondered how they would make money that way, but it looks likely they could pull this off," he said.

Although other companies offer databases of genetic information — most notably, Incyte Pharmaceuticals Inc., of Palo Alto, Calif. — the database available from Myriad is "one you'd certainly want to have in your basket of goods," Schmidt said. "I see it being used in combination with Incyte's, by the same subscribers, to give them another layer of information."

Early next year, Myriad plans to launch CardiaRisk, its genetic test for susceptibility to hypertension. The test identifies patients with the gene variant that causes them to retain sodium, thus increasing their risk of hypertension and related diseases. (See BioWorld Today, Nov. 17, 1997, p. 1.)

The company's nine discovered genes are undergoing development in pharmaceutical collaborations. "This is our fifth deal," Hockett said of the second Bayer pact. "We have a total of $250 million potentially committed."

As of Sept. 30, Myriad had $50.89 million in cash and equivalents, with a net loss of $1.79 million for the third quarter of 1997.

Myriad's stock (NASDAQ:MYGN) closed Thursday at $27.50, up $1.19. *

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