Pharmacopeia Inc., and Regeneron Pharmaceuticals Inc. have entereda long-term drug discovery collaboration aimed at finding smallmolecules that can mimic or antagonize a host of cytokines andgrowth factors.

Under the 50-50 agreement, Pharmacopeia, of Princeton, N.J., willsupply the chemicals and Regeneron, of Tarrytown, N.Y., willevaluate their potential as drugs.

The aim of the collaboration is "essentially the holy grail of thebiotechnology industry," said Leonard Schleifer, Regeneron'spresident and CEO. "And, that is to develop small molecules toimitate what large proteins do."

Current recombinant growth factors and cytokines have profoundeffects, but the size of these molecules makes delivering the drug inan active form difficult. For example, human growth hormonerequires daily injections. In looking for small molecules, Regeneronand Pharmacopeia hope to create drugs that will control inflammationor mediate growth, but can be taken orally.

The collaboration will rely on Pharmacopeia's proprietary taggingtechnology to create compounds and Regeneron's expertise in proteingrowth factors and receptors. The collaboration will focus on findingantagonists to cytokines such as Interleukin 4, Interleukin 6 andinterferons and compounds that mimic the activities of moleculessuch as insulin, growth hormone and leptin.

Each company will fund their respective activities. Financial termswill be negotiated should any of the compounds show significantactivity, said Pharmacopeia's investor relations manager, SueRodney.

"This is the ideal collaboration," said Rodney. "Pharmacopeia is theindustry leader in the chemical side and Regeneron is the leader inthe biological side."

Regeneron's stock (NASDAQ:REGN) lost $0.50 Thursday to closeat $22.625. Pharmacopeia (NASDAQ:PCOP) ended the day at$23.875, down $0.25. n

-- Lisa Seachrist Washington Editor

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