Ontogen Corp. on Wednesday reached its goal of three partnershipsthis year when it signed an $18 million deal with Novo Nordisk A/S.

The companies will work on developing small-molecule inhibitors ofprotein tyrosine phosphatase (PTPase) involved in the insulin signaltransduction pathway. Ontogen has discovered PTPase inhibitors andNovo Nordisk has a set of enzymes it believes important to thatprocess, said Barry Toyonaga, Ontogen's president and CEO.

The deal came about in a unusual way. Ontogen had published anarticle on PTPases in a scientific forum on the Internet, where it wasseen by a researcher working in that area for Novo Nordisk. "Hisinterest," Toyonaga said, "was looking at PTPases relevant to theinsulin signal transduction process."

Privately held Ontogen, which was founded in June 1992 and beganoperations a year later, has technologies that enhance the speed ofcompound synthesis, purification and analysis. The company isworking on a method of synthesizing up to 1 million compounds perday in milligram quantities that are individually pure and fullycharacterized.

Not only was the Novo Nordisk deal the company's thirdcollaboration this year, it was the third in four months. In AugustOntogen entered a potential $41 million deal with BoehringerIngelheim GmbH, which gained a co-exclusive license to thetechnology and will help develop it. (That does not preclude Ontogenfrom using the technology itself or in other collaborations.) In lateJune, Ontogen and Kanebo Ltd., of Osaka, Japan, agreed to a $22million deal to develop compounds for skin diseases.

The deal with Novo Nordisk, of Bagsvaerd, Denmark, calls forpayments to Ontogen of up to $18 million in research anddevelopment funding and milestones over three years. Thecollaboration includes an equity investment and potential royalties.Novo Nordisk in return gained an exclusive worldwide license to alltherapeutic and diagnostic products developed in its core businessareas: diabetes, women's health and growth-related conditions.

Ontogen said PTPases belong to a class of cellular enzymes involvedin the regulation of various receptor signal transduction systems.Studies have shown that members of the PTPase family modulate theinsulin receptor. Since PTPases bind to the insulin receptor, thetheory is that, like insulin, they initiate the biochemical processes thatenable cells to metabolize sugar/nutrients.

Ontogen, of Carlsbad, Calif., has compounds that inhibit certain typesof PTPases. Novo Nordisk has maintained a biology program that hascloned and expressed novel PTPases relevant to the insulin signalingprocess. Ontogen will screen its PTPase library against the partner'senzymes in the search for active compounds.

In a sense, Toyonaga said, the parties will be trying to mimic theaction of insulin by interfering in the chain of events that it triggers,not at the receptor but further down the signal transduction pathway."Hopefully, if we can come up with potent and selective inhibitors ofrelevant PTPases we may have a drug to treat complications ofdiabetes."

Toyonaga said the companies will have much more than a screeningrelationship. They both will be doing work in biology and chemistryand will be sharing information throughout the collaboration.

Ontogen generates its small-molecule libraries using solid phasemethods through its OntoBLOCK technology, which can synthesize1,000 compounds per experiment. Ontogen and BoehringerIngelheim, of Ingelheim, Germany, are developing technology, calledOntoSORT, to increase the number 10- to 100-fold. Ontogen also hasa less-developed technology, OntoCODE, involving a radiofrequencytagged library approach.

Ontogen kept a low profile over its first few years, when it wascapitalized with $10 million from Amgen Inc., of Thousand Oaks,Calif., and Sequoia Capital, of Menlo Park, Calif. Amgen andOntogen had a collaboration in the area of immunology. Thecompany later received a $4 million investment from Lombard Odier,of Zurich, Switzerland.

Toyonaga said Ontogen accomplished its goal, through thecollaborations, of financing the company without additional, dilutiveventure rounds or a premature initial public offering. The goal, hesaid, was to put together three or four multi-year partnerships withnon-cancelable cash components of about $25 million each, whichwould finance the company for three or four years. "We've comeclose to that," he said. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.