Arris Pharmaceutical Corp., through a deal with SmithKlineBeecham, is applying its technology to intracellular proteases andviral diseases for the first time.

The companies said Thursday they agreed to collaborate on a dealthat initially will start with a proof-of-concept phase. If that issuccessful a full-fledged research and development collaboration willfollow in which Arris would be entitled to research and developmentsupport, milestone payments and sales royalties.

Specific terms were not disclosed, but an Arris spokeswoman said thedeal is "similar in size and scope" to a potential $40 millioncollaboration Arris signed last year with Pharmacia and Upjohn inc.,of Uppsala, Sweden. That deal targets inhibitors of serine proteasesfor anti-thrombotic applications.

The deal with SmithKline, of Middlesex, U.K., involves using Arris'Delta technology, a tool for designing small molecules that areselective and potent inhibitors of protease.

"We're going to try to show Delta can be used to design inhibitors ofintracellular viral proteases," said Shari Annes, Arris' vice president,investor relations and corporate communications. "It's a differentapproach to infectious diseases, and a potential solution to drugresistance."

Part of the significance to Arris is the deal represents the firstapplication of the technology to the area of infectious diseases, apotential pipeline extension. Another significant aspect is theapplication of the technology to intracellular targets. Showing thatcan be done is the main reason for the proof-of-concept clause,Annes said.

"Without this collaboration we would not have had access to these[antiviral] targets," Annes said. "This sets a new kind of stage forArris in which we are in effect licensing Delta for the internal use ofbig pharma, and we become their consultants."

The collaborators are going to target serine and cysteine proteases, soHIV is not a target area. Specific disease areas, however, were notdisclosed.

Arris' lead product, APC 366 for asthma, is a small molecule thatinhibits the mast cell protease tryptase, a mediator of inflammation.Arris and collaborator Bayer AG, of Leverkusen, Germany, recentlycompleted a Phase IIa study.

Arris has two programs ongoing with Pharmacia & Upjohn inaddition to their work on serine protease inhibitors. In one deal thepharmaceutical company is using Arris' combinatorial chemistry todevelop a probe library of 250,000 small-molecule compounds. Inthe third area the companies are working to develop a human growthhormone mimetic. Arris also is applying mimetics technology toThousand Oaks, Calif.-based Amgen Inc.'s Epogen.

Arris' stock (NASDAQ:ARRS) gained 38 cents Thursday to close at$11.88. n

-- Jim Shrine

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