Privately held Mitotix Inc., with expertise in molecularregulators of cell division, signed its first major corporatecollaboration with DuPont Merck Pharmaceutical Co.worth a potential $55 million for development of anti-cancer drugs.

Tom Needham, manager of business development forMitotix, said the three-year-old Cambridge, Mass., start-up company will receive an up-front equity investmentand four years of research funding totaling $17 million.

The equity investment, Needham said, accounts for morethan half of the $17 million and will give DuPont Merck,of Wilmington, Del., less than a 15 percent stake.

Mitotix could receive another $38 million in productdevelopment milestones and additional research funds.The latter amount is tied to an option DuPont Merck hasfor extending the collaboration after four years.

The deal also included a commitment from Mitotix'scurrent venture capital investors to make a combined $3million equity investment.

Mitotix Chairman William Helman, of GreylockManagement Corp., in Boston, said that in addition to hisfirm, major investors include Mayfield Fund, of SanFrancisco, and J.H. Whitney and Venrock Associates,both of New York.

Helman, who led the effort to form Mitotix in 1992, saidthe company has raised more than $23 million in venturecapital.

Helman said Mitotix had several options forcollaborators, but considered DuPont Merck _ a jointventure between DuPont Corp., of Wilmington, Del., andMerck & Co., of Whitehouse Station, N.J. _ the mostcommitted partner.

The deal gives DuPont Merck exclusive rights to usecertain cyclin-dependent kinases (Cdks) discovered orlicensed by Mitotix as targets for potential drugs. Cdks,or cyclins, are cell division regulating enzymes, which arealtered in cancer cells. Cdk4/cyclin D and Cdk2/cyclin E,which involve different pathways in the cell divisioncycle, will be the main focus of the cancer drug discoveryeffort.

Muzammil Mansuri, vice president of drug developmentfor Mitotix, said the research initially will targetCdk4/cyclin D and the p16 tumor suppressor gene. Whenthe latter isn't working properly, the former promotesuncontrolled cell growth. High expression of cyclin D hasbeen found in breast, colon and esophageal cancers andlymphomas.

Mitotix has developed screens for assessing the ability ofDuPont Merck's compounds to act either as inhibitors ofthe cyclins or imitate the p16 tumor suppressing activity.

Mansuri estimated it will take several years before acompound is ready to enter clinical development.

In the agreement, DuPont Merck has exclusive rights tothe Cdk4/cyclin D target in cancer and all other potentialindications. The pharmaceutical company only has rightsto use the Cdk2/cyclin E target and certain other Cdks forcancer drugs. It also will be able to commercializeradiopharmaceutical diagnostics based on the Cdks.

Mitotix has rights to non-cancer indications forCdk2/cyclin E and Cdks other than Cdk4/cyclin E that arepart of the collaboration. It also has an option to co-promote drugs with DuPont Merck in the U.S. Mitotixretains rights to the Cdks for therapeutics based on genetherapy and antisense technology and will receiveroyalties on all drug sales.

The collaboration with DuPont Merck includes a separateresearch agreement based on the p53 tumor suppressorgene, but terms were not disclosed. n

-- Charles Craig

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