The developmental biology company Ontogeny Inc. partnered itsHedgehog protein technology in a second collaboration that, togetherwith the first, will mean a cash infusion of nearly $130 million.

On Monday, Ontogeny and Boehringer Mannheim GmbH agreed to a$40 million deal to use Hedgehog-based therapeutics for treatment ofbone, cartilage and other skeletal disorders. In July Ontogeny andBiogen Inc. agreed to a deal worth nearly $90 million that givesBiogen rights to the three specific Hedgehog proteins _ Sonic, Indianand Desert.

The class of proteins is responsible for inducing formation orregeneration of tissues. Inducing molecules tell cells how to matureor which differentiation pathways to take. They also control normalcell regeneration and repair in adults.

Boehringer Mannheim, of Mannheim, Germany, gained rights to anymolecules discovered, gene therapy and local delivery within thebone. Ontogeny, of Cambridge, Mass., retained rights to systemictreatments of bone disorders, including osteoporosis and cell therapy.

The equity portion of the deal gives Boehringer Mannheim aninterest of less than 5 percent in Ontogeny, said Doros Platika,chairman and CEO of Ontogeny. Another payment of a "few milliondollars" was made as a license fee. Much of the remainder, he said,would be paid in 18 months or so and be based on preclinical resultsin animal models of bone repair. Positive results would triggermilestone payments and additional equity investments.

A separate part of the collaboration involves a joint research programto identify molecules _ inside or outside the Hedgehog pathway _ inthe area of local bone disorders. Discovery of those molecules wouldtrigger additional milestones for Ontogeny. Discovery of moleculeswith activity in local bone disorders and other areas would result inBoehringer Mannheim getting rights in the local area while payingmilestones and Ontogeny getting rights to other applications, with theoption of partnering the findings. Ontogeny would get rights to anymolecules outside of local bone disorders.

Ontogeny in its two collaborations retained rights to all diagnosticapplications, small-molecule screening, systemic use in bone, andgene therapy for everything except local bone disorders, such astreatment of fractures.

"We have four other deals proposed to us," Platika said, adding thatthe company now is too small to properly serve that many partners."It's going to require a growth rate of 50 percent per year to keep upwith the alliances we're signing.

"One of the big bottlenecks in genomics programs," Platika said, "isthey are developing a lot of sequences and genes but having a hardtime figuring out the relevance and function. What Ontogeny is doingis putting the paradigm on its head. We're starting with function,looking at critical moments in development of vital organs; that givesus an idea where a compound may be useful."

Platika said the Indian Hedgehog protein has been shown to inducebone formation in adults in 11 days. "It appears to be the masterswitch. It has the potential to make nice, young bone."

Biogen has rights to the proteins themselves, for systemic use in thebody and local use in the brain. The initial focus is on indicationssuch as Parkinson's disease, Huntington's disease and stroke. Biogen,of Cambridge, Mass., will invest $6 million at first and pay up to $27million in license fees and milestones for each of the three proteins.(See BioWorld Today, July 22, 1996, p. 1.) n

-- Jim Shrine

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