By Randall Osborne

Encouraged by success in researching the genetic basis of atherosclerosis, Eli Lilly and Co. decided early to extend its three-year collaboration with Millennium Pharmaceuticals Inc. for another two years and expand the partnership to study congestive heart failure.

Millennium, of Cambridge, Mass., joined forces with Indianapolis-based Lilly in October 1995, with Lilly pledging $40 million in equity investments, licensing fees and research payments, plus possible milestone payments and royalties. In all, the deal's value to Millennium was more than $50 million.

Using transcriptional profiling and mouse genetics, Millennium has been working to uncover the pathological processes that lead to atherosclerosis, identify genes as therapeutic targets and deliver the targets to Lilly.

Achievements have been made in "key areas," said Steve Holtzman, Millennium's chief business officer. He declined to be more specific. A year before the three-year check-off point at which Lilly could decide whether to continue the pact, the company has decided to keep paying Millennium for two more years, fulfilling the five-year collaboration.

"The average funding has been on the order of $6 million a year," Holtzman said.

The deal has helped Lilly expand its in-house genomics programs and has put Millennium "further down the value chain," Holtzman said.

Millennium's takeover of ChemGenics Inc., of Cambridge, Mass., in a stock swap in January broadened its capabilities in genetic research. (See BioWorld Today, Jan. 22, 1997, p. 1.) The collaboration aims next at uncovering the genetic roots and treatment of congestive heart failure.

"How do you measure progress?" Holtzman said. "The way you measure progress is you get relationships with big pharmaceutical companies, and you deliver targets."

Last spring, Millennium signed a separate, three-year agreement with Lilly, under which Lilly would provide up to $70 million in funding to a newly created Millennium subsidiary, Millennium BioTherapeutics. Lilly made a $20 million equity investment in exchange for an 18 percent equity share, and pledged to pay $8 million to $10 million per year for research. (See BioWorld Today, May 30, 1997, p. 1.)

Millennium's stock (NASDAQ:MLNM) closed Friday at $18.625, up $0.125. *