By Frances Bishopp
Completing its fourth deal in a week, Oncogene Science Inc. reported a $30 million collaboration with Hoechst Marion Roussel Inc. to develop orally active, small molecule inducers of erythropoietin (EPO) gene expression for the treatment of anemia due to chronic renal failure and anemia associated with AIDS and cancer chemotherapy.
In a flurry of activity on the same day, Oncogene, of Uniondale, N.J., also reported Wednesday it formed a collaborative research, development and commercialization co-venture with Sepracor Inc. for the discovery of small molecule drugs targeting selected indications using Oncogene's platform of drug discovery technologies.
On Tuesday, Oncogene signed an exclusive worldwide license with The Dow Chemical Co., of Midland, Mich., giving Oncogene rights to use more than 140,000 compounds for screening and potential development of small molecule drugs.
On March 13, Oncogene signed a research and license agreement with Sankyo Co., of Tokyo, reportedly worth $25 million, to target small molecule compounds that interfere with the replication of the influenza virus.
"We have been working this year to aggressively transition the company to a fully integrated drug discovery company," Colin Goddard, executive vice president and COO at Oncogene, told BioWorld Today.
A key part of that strategy, Goddard said, was the acquisition of MYCOsearch, of Durham, N.C., in May 1996 for $5.3 million and Aston Molecules Ltd., of Birmingham, U.K., in September 1996 for 284,000 shares of Oncogene stock.
With MYCOsearch's expertise in natural products and Aston Molecules' combinatorial chemistry, Oncogene has added the technology for creating large libraries of potentially new therapeutic compounds, Goddard said.
"We have used this as a springboard to cultivate a lot of business development activity," Goddard said, "to both add the missing pieces, and also to get more value from the deals we are doing, in terms of our ability to move a pipeline of compounds toward the clinic."
Recent acquisitions and collaborations represent an effort by Oncogene to evolve beyond the base for which it is known: high-throughput screening and gene transcription, Goddard said. "We want greater participation in the overall process, which gives us a greater return as a result," he said. "We now have 24 programs in active drug discovery."
Analyst Jay Silverman, with Robertson Stephens & Co., of San Francisco, said the number of Oncogene's recent agreements and collaborations is testimony to its platform technology.
"Oncogene will continue to create these value-added joint ventures with major pharmaceutical companies who are actually coming to Oncogene for their expertise," Silverman said. "The stock has yet to reflect the value of this company. Their technology has come together for them in the last two years and management has done a poor job of translating that to Wall Street. The size of these deals is formidable and compelling," he said.
Under terms of the agreement with Hoechst Marion Roussel, of Kansas City, Mo., Oncogene will receive the $30 million in research funding, milestone payments and success fees, together with royalties on the sales by Hoechst of any products resulting from the collaboration.
The program will focus on the preclinical and clinical development of lead compounds previously discovered by Oncogene from its natural products and combinatorial chemistry libraries and also from Hoechst's compound library, using Oncogene's gene transcription drug discovery technology.
Both Oncogene and Hoechst will contribute medicinal chemistry and preclinical optimization teams and Hoechst will be responsible for the clinical development of drug candidates emerging from the program.
Hoechst licensed gene activation technology patents from Cell Genesys Inc., of Foster City, Calif., in December 1996 and gene activated EPO for the treatment of anemia associated with chronic renal failure from Transkaryotic Therapeutics Inc., of Cambridge, Mass., in October 1996. These two deals targeted an injectable product for stimulating EPO expression, whereas the current Oncogene-Hoechst collaboration will target an oral product.
Under terms of the Sepracor agreement, Oncogene and Sepracor, of Marlborough, Mass., will provide equal funding to the program, including an equal number of scientists, and will share equally in the profits of any drugs resulting from the collaboration.
Oncogene will contribute technologies in assay, biology, high-throughput screening and large, compound libraries, informatics, molecular modeling and pharmaceutical development operations.
Sepracor will provide its combinatorial chemical libraries, based on novel chemical structures and knowledge in medicinal chemistry and pre-clinical and clinical development. Financial details of the collaboration were not disclosed.
Under the Dow Chemical agreement, Dow, of Midland, Mich., will receive approximately 350,000 shares of Oncogene Science common stock, using stock Oncogene recently purchased from Becton Dickinson and Co., of Franklin Lakes, N.J.
The library of compounds from Dow will enable Oncogene to expand its portfolio of compounds and increase its chances of identifying target compounds. Resulting compounds will be optimized using Oncogene's technologies, including in vitro and live-cell-based assays and combinatorial chemistry.
Under terms of the license, Oncogene will own rights to most of the drugs developed from Dow's compound library.
Under terms of the Sankyo agreement, Oncogene will work in partnership with MRC Collaborative Center (MRC CC), of the U.K. The partnership will receive license fees, research funding and milestone payments from Sankyo, plus royalties on product sales. Sankyo will have exclusive worldwide commercialization rights to all products. Lead compounds from Oncogene's libraries will be identified and further evaluated for antiviral activity in in vitro and animal models at MRC CC.
In April 1996, Oncogene, New York University and Pfizer Inc., of New York, formed a joint venture company, Anaderm Research Corp, to discover prescription cosmetic products for the treatment of certain chronic conditions involving skin and hair.
Currently, Oncogene and Pfizer are conducting drug discovery operations aimed at specific gene targets that have been identified in research programs. Oncogene owns 14 percent of Anaderm and will receive royalties on resulting products.
Oncogene recently renewed a 10-year collaboration with Pfizer for an additional five years; it focuses on the discovery and development of cancer therapeutics that target oncogenes and tumor suppression genes.
Oncogene's lead product, transforming growth factor-Beta 3, is being developed in collaboration with Novartis AG, of Basel, Switzerland.
Oncogene, as of Sept. 30, 1996, had $48 million in cash for the year and a net loss of approximately $9.9 million.
Oncogene's stock (NASDAQ:ONCS) closed Thursday at $6, down $0.50. *