Myriad Genetics Inc. is getting up to $71 million in acollaboration with Bayer Corp. to discover genes forobesity, osteoporosis and asthma, the companies saidTuesday.

Bayer made a $10 million equity investment in Myriadand is providing $25 million in research payments overfive years. Myriad can earn another $36 million byattaining various preclinical and clinical milestones.

The deal is structured similarly to the one Myriad, of SaltLake City, signed last April with Ciba Pharmaceuticals,of Summit, N.J., to discover genes that will lead todevelopment of drugs for cardiovascular diseases. Myriadis getting $32 million in equity funding and researchpayments in that deal, and can realize another $28 millionin milestone payments.

The genomics company's third major collaboration iswith Eli Lilly and Co., of Indianapolis, related to theBRCA1 tumor suppresser gene, which is implicated inbreast and ovarian cancers.

Bayer Corp. (formerly Miles Inc.), of Pittsburgh, is theU.S. subsidiary of Bayer AG, of Leverkusen, Germany.Bayer bought 588,000 shares of Myriad, for $17 each,and gained a stake of about 10 percent. Ciba owns about7.5 percent of Myriad's 5.5 million outstanding shares,and about 5 percent are held by Lilly.

Myriad is under registration for its initial public offeringin which it proposed the sale of 2 million shares at $15 to$17 apiece.

Peter Rae, director of the Institute for ResearchTechnology for Bayer's research center in West Haven,Conn., told BioWorld that using genetics to get to theunderlying causes of these multigenic diseases wasdeemed to be the most efficient route.

"We had identified Myriad as a leader in humangenetics," Rae said. "And we opted for the positionalcloning route to look for therapeutic targets in asthma,obesity and osteoporosis."

Myriad's gene-discovery strategy starts with a geneticanalysis of large families that are predisposed to aparticular disease. That is combined with the company'smapping, sequencing and cloning technologies todiscover and characterize disease-causing genes andmutations.

Myriad already has ongoing collaborations to obtainfamily data in each of the three targets of thecollaboration. The University of Utah, in Salt Lake City,has data bases on families with obesity. And Myriad isworking with Intermountain Health Care, of Salt LakeCity, which has patient records on osteoporosis andasthma.

The collaboration with Bayer also is similar to the Cibadeal in that Myriad retained worldwide diagnostic rights,including the right to develop and market genetic teststhat screen for genes that predispose people to thetargeted diseases. Bayer will get a worldwide exclusivelicense to develop and commercialize therapeuticproducts, including small-molecule, protein-replacementand gene therapeutics.

Rae said Bayer will work with Myriad to characterizegenes after they have been identified and isolated byMyriad. Then Bayer will develop drug-screening assays,particularly for the discovery of small molecules, he said.

Bayer has ongoing internal programs in all three targetareas, Rae said, but has no work or collaborationsongoing using a genomics approach. Separately, Bayerand Arris Pharmaceuticals Inc., of South San Francisco,signed a five-year collaborative agreement last year todevelop compounds for inflammatory diseases,particularly asthma. The lead focus in that potential $70million deal is orally available compounds that inhibittryptase and chymase.

Rae said Bayer, in its work with Myriad, hopes to haveidentified and isolated some genes within two years. n

-- Jim Shrine

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

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