Over the next several years Sequana Therapeutics said it expects toinvest more than $40 million in cash and equity to add functionalgenomics capabilities to its disease gene discovery technology.

The La Jolla, Calif., company was to announce today a series ofmoves including the takeover of NemaPharm Inc., of Cambridge,Mass., for an undisclosed amount of Sequana stock. NemaPharm usesthe nematode worm as a model for understanding human genes andfor screening potential drug candidates.

Kevin Kinsella, Sequana's president and CEO, said his company alsoacquired access to technology using mouse and fruit fly models.

The expertise in mouse genetics was licensed from GenPharmInternational, of Mountain View, Calif. and the technology involvingfruit flies will be provided through consulting agreements withgeneticists Charles Zuker and William McGinnis at the University ofCalifornia at San Diego.

Kinsella said when disease genes are identified, the correspondinggenes will be knocked out in the worm, mouse and fruit fly models todetermine how the mutated genes affect other cellular mechanisms.

One initial project, Kinsella said, will be to use fruit flies todetermine the function of certain human obesity genes.

The technology acquisitions, he added, are the first in a series ofsteps over the next several years to expand Sequana's gene discoveryactivities to include an understanding of how those genes work, suchas their interaction with signaling pathways and proteins.

Sequana, which uses positional cloning to find disease genes, will beable to study genes it has identified as well as those found in otherlaboratories.

Kinsella estimated his company will invest "at least $40 million incash and equity" over the next several years to expand its functionalgenomics capabilities.

NemaPharm, which has 12 employees and laboratory facilities, willcontinue to operate in Massachusetts.

In addition to licensing the mouse genetics expertise from GenPharm,the scientist who developed the technology, Ted Choi, also is joiningSequana.

Kinsella said Sequana will use the functional genomics technology inassociation with all its collaborations.

The company has gene discovery agreements with BoehringerIngelheim GmbH, of Ingelheim, Germany, for asthma; Corange Ltd.,of Bermuda, and its subsidiary, Boehringer Mannheim GmbH, ofMannheim, Germany, for osteoporosis; and Glaxo Wellcome plc, ofLondon, for Type II diabetes. n

-- Charles Craig

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