By Charles Craig

SAN FRANCISCO — Bristol-Myers Squibb agreed to pay Cadus Pharmaceuticals Corp. $10 million over the next two years to extend and expand its drug discovery collaboration focusing on a broad range of diseases, such as central nervous system and cardiovascular disorders.

Cadus, of Tarrytown, N.Y., and Bristol-Myers, of Princeton, N.J., began working together in July 1994 to find drugs that affect G protein-coupled receptors, which transfer external signals into cells to regulate most cellular functions.

Bristol-Myers, which owns 17 percent of Cadus, has made more than $30 million in equity and research payments to the biotechnology company over the last two and a half years.

Cadus has developed functional drug screening technology using yeast cells modified with human genes to create specific signal transduction pathways triggered by cell surface receptors, such as G protein-coupled receptors.

The hybrid human-yeast cells allow researchers to evaluate potential drug candidates for their binding capabilities and for how the compounds affect the function of the receptors.

Jeremy Levin, Cadus’ president and CEO, discussed the expanded Bristol-Myers alliance at the 15th annual Hambrecht & Quist Healthcare Conference in San Francisco.

Levin said his company has genetic sequences for a potential 400 G protein-coupled receptors.

The initial collaboration with Bristol-Myers involved only a few of those receptors. The expansion gives the pharmaceutical company access to several more, Levin said, plus some other molecular targets downstream from the receptors along the signaling pathway inside cells.

Bristol-Myers is using Cadus’ yeast-based assays to identify small molecule drug candidates to treat cardiovascular diseases, central nervous system disorders, acute inflammation, obesity and diabetes.

Cadus also has assays for two other receptor types involved in cell growth and immune system regulation.

Levin said Cadus, with its yeast-based functional assay systems, has identified multiple molecular targets for therapeutic intervention.

“We have driven 21 targets into the market place,“ Levin said, “and we have another 19 targets we’re working with.“

In addition to the collaboration with Bristol-Myers, Cadus has a drug discovery pact with Solvay Group, of Brussels. Solvay is targeting cardiovascular, central nervous system, gynecological and gastrointestinal disorders.

Together the Solvay and Bristol-Myers deals could be worth up to $100 million to Cadus.

Cadus also has its own drug discovery programs focused on acute and allergic inflammation and cancer.