Ariad Pharmaceuticals Inc. could receive up to $40million over the next five years from Germany-basedHoechst Marion Roussel for a drug discoverycollaboration targeting the underlying cause ofosteoporosis and other hyperresorptive bone diseases.
The Hoechst agreement is based on Ariad's work indeveloping small molecule compounds that inhibit Src,an intracellular signaling protein that is among a group ofmolecules called protein tyrosine kinases. Src is believedto regulate the activity of osteoclasts, which are cells thatdissolve bony tissue.
Under normal conditions in the body, osteoclasts resorbbone that is damaged so osteoblasts can replace it withnew bone. Osteoporosis occurs when more bone isdissolved than is replaced.
Hoechst Marion Roussel, a subsidiary of Germany-basedHoechst AG, paid Ariad, of Cambridge, Mass., $10million up front. The pharmaceutical firm also agreed tocontribute research funding over the next five years toAriad in the amount of $30 million with $10 million tiedto research milestones.
"Those are near-term milestones," said Harvey Berger,Ariad's chairman and CEO. "All those milestones areachievable before we finish Phase I trials and most areachievable before clinical trials begin."
Berger said Ariad has identified several possible leadcompounds, which are being tested in animal models.
"Preliminary data show the compounds are safe andeffective," he said, adding "clinical trials are a few yearsoff."
The collaboration with Hoechst, Berger said, is hiscompany's first major corporate partnership, giving Ariadall the resources necessary to fund the entire osteoporosisdrug discovery and development program.
In addition to funding Ariad's research, Hoechst willassume the cost of clinical studies and pay royalties onmarketed products to Ariad.
With Hoechst's $10 million initial payment, Berger said,Ariad has $30 million in cash and a burn rate of less than$10 million a year. The company has 19 million sharesoutstanding.
Ariad's drug discovery programs target development ofsmall molecules that affect intracellular signaltransduction pathways. In addition to osteoporosis,Ariad's research includes intracellular signaling proteinsinvolved in allergies and asthma and immune-relateddisorders. The company also has a gene therapy program,which includes a collaboration with South San Francisco-based Genentech Inc.
The osteoporosis, allergy and immune-related diseaseprograms are the most advanced. All three haveprogressed to preclinical studies.
Berger said Ariad hopes to negotiate other corporatecollaborations using the same model as the Hoechstalliance _ "a single target and single disease."
Ariad's stock (NASDAQ:ARIA) closed Monday at $4.62,up 62 cents. n
-- Charles Craig
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