Two small companies with specialized technologies have agreed towork together to create more value than either could going at it alone.

Aurora Biosciences Inc., of La Jolla, Calif., and ArQule Inc., ofMedford, Mass., agreed Monday to use Aurora's screeningtechnologies against ArQule's small molecules to search for drugleads. The companies would jointly own products coming from theresearch.

Neither company is paying the other in the collaboration, and noequity is being exchanged, said Timothy Rink, chairman and CEO ofAurora.

"It's part of a growing pattern where companies, particularly smallercompanies, are trading or bartering technology to mutually createbetter value for both parties," Rink said. "It's a way of trying to getmore value out of the highly specialized and dense expertise thesecompanies are developing."

Aurora's lead technology is based on fluorescence-based screens inmammalian cells to determine the biological effectiveness of drugcandidates against specific targets. The company also hasbiochemical assays.

ArQule uses structure-guided and rational drug design tools to helpdevelop its combinatorial chemistry libraries. The company providestwo types of arrays: Mapping Array compound sets, which are novel,diverse small-molecule compounds; and Directed Array compoundsets, which are arrays of analogues of a particular lead compound.

The Mapping Array technology will be used in the collaboration withAurora. Last month ArQule registered for an initial public offering inwhich it proposed selling 2 million shares at $11 to $13 each. (SeeBioWorld Today, Sept. 3, 1996, p. 1.)

Rink said screens will be used against a wide variety of targets in thework with ArQule. It is not focused on specific therapeutic areas, hesaid.

Lead compounds resulting from the collaboration will be evaluatedby a joint committee to determine the best plan for furtherdevelopment. The companies will share ownership rights and shareany resulting revenues.

Privately held Aurora, founded in 1995, also is developing next-generation ultra-high-throughput screening systems. The companymay attempt to enter into deals to implement those advancedscreening systems for in-house uses by a few pharmaceuticalcompanies, which would help sponsor the research and developmentof the systems. n

-- Jim Shrine

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