Eli Lilly and Co. and Millennium Pharmaceuticals Inc.are collaborating to develop drugs for atherosclerosis, andwith it are exchanging technologies in a move that willprovide Lilly genomics technologies and Millenniumaccess to high-throughput screening and combinatorialchemistry libraries.

The deal assures privately held Millennium $40 millionin equity investments, licensing fees and researchpayments over five years, with additional milestone androyalty potential. The deal, valued at more than $50million, is worth more to Millennium in the ability itprovides the company to expand its drug-developmentcapabilities by tapping into Lilly's libraries.

It is the second large corporate collaboration forMillennium, of Cambridge, Mass., which last year signeda potential $70 million deal with Hoffmann-La RocheInc., of Nutley, N.J., in the areas of obesity and Type IIdiabetes. That deal, like the one crafted with Lilly,allowed Millennium to retain certain rights for its owndrug development.

"It's always been implicit that Millennium's goal was togo further down the development pathway to generateadditional value," Steven Holtzman, the company's chiefbusiness officer, said Tuesday. "You forward-integrate asfar as is rational. This is part of Millennium's strategy tobe more than simply an information company."

In atherosclerosis, Lilly, of Indianapolis, will beresponsible for worldwide development of smallmolecule drugs and therapeutic proteins coming out ofthe research. The companies may work together on genetherapy approaches, or will have co-exclusive rights. AndMillennium will be responsible for worldwidedevelopment and marketing of antisense drugs, as well asdiagnostic products and services, arising from the effort.

Lilly's equity stake will be less than 10 percent,Holtzman said. Roche owns less than 15 percent ofMillennium, he said.

Both companies have research programs ongoing inatherosclerosis, which is a degenerative disease in whichfatty deposits clog arteries. The companies said geneticmakeup, as indicated by family history of heart disease, isby far more of a factor in the disease than smoking, highblood pressure and other causes. But, they said, thegenetic basis of the disease remains unclear.

Most of the collaboration's early research will beconducted by Millennium, and will involve identificationof genes using the company's genetics, genomics andbioinformatics technologies. Among Millennium'salready established research collaborations in the field areefforts to identify the genetic basis of atherosclerosis,study progression of the disease in mouse models, andfocus on the activation of endothelial cells that line bloodvessel walls.

With the deal, Lilly will help Millennium establish high-throughput small-molecule screening capabilities, andshare screening libraries for diseases outsideatherosclerosis and certain other areas important to Lilly.In return, Millennium will share genomics technologies_ such as high-throughput sequencing andbioinformatics tools _ that Lilly intends to applythroughout its drug-development process.

Millennium combines various approaches in its research,including its Rapid Analysis of Differential Expression(RADE) system for large-scale automated identificationof modulated genes. The company also tries to identifyapplicable mutant genes in mouse models, and usespositional cloning and other techniques to isolate diseasedgenes.

"Lilly has a tremendous interest in our RADEtechnology," Holtzman said, "and we have put that into ahigh-throughput mode and will be working with them todeploy that technology in an interesting new way, whichis to use it in connection with compound screening."

August Watanabe, president of Lilly ResearchLaboratories, said, "One of the key objectives of thiscollaboration will be the two-way sharing of technologythat will allow both companies to leverage each other'scapabilities in several program areas. Lilly chose topartner with Millennium because of its multiprongedapproach to gene discovery, its innovative bioinformaticstechnologies and its broad array of technologies andcapabilities characterizing genes in terms of theirbiological function and role in disease initiation andprogression." n

-- Jim Shrine

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