Biogen Inc. formed a collaboration Friday with Ontogeny Inc. to tapinto work being done by some of the leaders in the emerging field ofdevelopmental biology.

Ontogeny has rights to the family of Hedgehog proteins, from a classresponsible for inducing formation or regeneration of tissues. Biogenwill invest $6 million initially in Ontogeny to cover two years ofresearch and then pay up to $27 million in potential license fees andmilestone payments for each of the three proteins, bringing the deal'spotential to nearly $90 million.

"This is kind of the coming out party for Ontogeny," said DorosPlatika, who Friday was named president and CEO of the two-year-old company. "[Developmental biology] is a field that's poised totake off and become an integral component of drug discovery," hesaid, adding that Biogen's commitment helps validate the science.

Inducing molecules are those that tell cells how to mature, or whichdifferentiation pathways to take. The same molecules also controlnormal cell regeneration and repair in adults. The company said onlyfive families of inducing molecules have been discovered to date,including the Hedgehog.

The Hedgehog family of proteins _ Sonic, Indian and Desert _ areinvolved in the areas of the central nervous system (CNS), bone andcartilage, fertility, cancer and other organs. "The effects are highlyspecific," Platika said. Ontogeny's goal is to use the inducingmolecules to repopulate cells where they are absent or out of balance.

Platika said Ontogeny already has developed a number of significantleads. The next 18 months or so, he said, will be used to generate thekind of animal data needed to support an investigational new drugapplication.

Ontogeny chose fellow Cambridge, Mass., company Biogen for itsfirst major collaboration because it believes the program will getmore attention there than it may have at an internationalpharmaceutical company. That commitment, Platika said, was asimportant as the dollar amount of the deal.

"We wanted to have a group that was committed to our approach andour system, where the partnership had the potential to grow into anaggressive development program," Platika said. "We didn't want ourprogram to be one of a hundred deals. We wanted to be front andcenter."

Part of the initial $6 million and parts of subsequent payments toOntogeny will be in the form of equity investments. Biogen gainedrights specifically to the proteins. Ontogeny retained gene therapyrights as well as rights to certain disease areas, such as boneregeneration and repair, and diagnostics.

Articles in the journals Nature, Current Biology and Cell from lastspring and summer described Hedgehog's discovery and work fromsome of Ontogeny's founding scientists, who are working withdopaminergic neurons for treating Parkinson's disease, among otherareas. One researcher likened the Sonic hedgehog's role in inducingthe CNS to recombinant erythropoietin's role in the hematopoieticsystem. (See BioWorld Today, June 2, 1995, p. 1.)

Ontogeny also has rights to the patched gene, which has beenimplicated in basal cell carcinoma, and also acts to hold backhedgehog from overdoing its role of briefing embryonic cells on howto develop and grow. When the patched, or ptc gene, goes wrong, itsmutant protein results in unbridled cell proliferation from hedgehog.

Ontogeny also has rights to eight other gene families, Platika said.The company has 25 employees and a new 30,000-square-footfacility. It was founded by scientists, many of them Howard Hughesinvestigators, at Harvard University, Columbia University andStanford University. Greylock Management was the first venturebacker, and Ontogeny now has raised more than $13 million fromventure capitalists.

Biogen's first _ and only other _ collaboration in which it is thefinancial backer came in August 1995 with the gene therapy researchcompany, Genovo Inc., of Philadelphia. Biogen said it will investmore than $35 million over five years in return for an equity positionand certain licensing rights. The first targets of that collaboration arediseases of the lung and liver.

Kathryn Bloom, Biogen's director of communications, said Biogentargeted two companies working in emerging areas.

The Ontogeny collaboration "gives us an opportunity to access anoutstanding company that has brought together some of the finestpeople in this area. Their scientific board includes about everybodyin developmental biology. It's a very important emerging field with alot of great possibilities." n

-- Jim Shrine

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