By Frances Bishopp

In an agreement worth up to $48 million if potential products make it through FDA approval, Transcell Technologies Inc., a wholly owned subsidiary of Interneuron Pharmaceuticals Inc., has signed on with Merck & Co. Inc. to discover and commercialize antibacterial agents.

The initial focus of the collaboration will be discovery and biological evaluation of analogues of two antibacterial compounds selected from distinct structural classes. Merck, of Whitehouse Station, N.J., will receive rights to any products arising out of the two research programs. The identity of the compounds was not disclosed.

Formed in 1992 and located in Princeton, N.J., Transcell is one of Interneuron's four subsidiaries. Transcell specializes in carbohydrate-based drug discovery and drug transport.

Under terms of the Merck agreement, Transcell will use its combinatorial technologies to prepare libraries of carbohydrate-derivative compounds for biological evaluation and development.

Transcell's technology will make possible the synthesis of large combinatorial libraries of compounds that have the flexibility to accommodate the presence and the location of specific carbohydrate elements, William Boni, vice president of corporate communications at Interneuron, told BioWorld Today.

"This is the kind of agreement," Boni said, "which is very important to private companies as they contemplate going public."

Transcell will receive from Merck an initial licensing payment and research support over two years, Boni said. Transcell will earn additional payments based upon achievement of defined milestones for each program.

Certain rights obtained by Merck are based on exclusive licenses held by Transcell and Interneuron from Princeton University, in Princeton, N.J. The university will receive undisclosed payments and royalties received from Merck.

Transcell's combinatorial carbohydrate technology is based on the work of Princeton University scientists Daniel Kahne and Suzanne Walker, both founders of Transcell.

Kahne's studies began with Bauhinia purpurea, a tropical vine from India that has seeds containing lectin, a protein with unusual binding specificity. Its numerous carbohydrate binding sites latch on to carbohydrates studding the surface of red blood cells, causing them to clump.

This property suggested to Kahne lectin was a good model system for cell adhesion proteins that recognize cell surface carbohydrates.

Kahne published an article in Science in November 1996 titled: "Parallel synthesis and screening of a solid phase carbohydrate library," which describes a strategy that identifies carbohydrate-based target molecules for any receptor.

The screen, Kahne said, could prove valuable for discovering new compounds that bind to proteins participating in cell adhesion. In particular, such drug development would target chronic inflammation, viral and bacterial infection, and primary and metastatic tumors.

The Princeton group tackled low yields, lack of specificity and long production times that had been problematic for carbohydrate scientists for many years, in an attempt to construct libraries involving synthesis of the molecules on a solid support.

Several years ago Kahne discovered a method of glycosylation at low temperatures, permitting nearly quantitative yields on the solid phase.

The carbohydrate library he designed contains 1,300 di-and trisaccharides, including two derivatives of the B. purpurea ligand. He and co-authors incubated some 9,000 resin beads -- six copies of the 1,300-member library -- with biotin-labeled lectin, then exposed them to avidin-linked alkaline phosphatase.

Over a 20-minute period, a total of 25 dark purple beads were picked out of the library and decoded, Kahne reported. His group ultimately synthesized two oligosaccharides that bound to the lectin more tightly than to a known compound.

Merck has an option to extend the field of the collaboration and license to include all antibacterial pharmaceutical products. In addition, Transcell would receive royalty payments on sales of any products that may be developed based on research programs.

Interneuron, of Lexington, Mass., has three other subsidiaries: Intercardia Inc., of Research Triangle Park, N.C., which focuses on gene discovery through developmental biology; InterNutria Inc., of Lexington, Mass., which focuses on dietary supplement products; and Progenitor Inc., of Columbus, Ohio, a functional genomics company.

As of March 31, 1997, Interneuron's cash, cash equivalents and marketable securities totaled $160 million. Interneuron's stock (NASDAQ:IPIC) closed Monday at $18.125, down $0.625. *