Onyx Pharmaceuticals is getting $11 million in equity investmentsfrom Warner-Lambert Co. and Eli Lilly & Co. in separatecollaborations disclosed Tuesday.

The bulk of the investment will come from Warner-Lambert _ in athree-year deal worth up to $25 million _ in an agreement related tocell-cycle regulation. Onyx and Lilly, in a one-year feasibility study,hope to identify proteins that interact with BRCA1, a tumorsuppresser gene implicated in breast and ovarian cancers.

In addition to the equity investment from Warner-Lambert, Onyx willget an up-front payment, milestones and royalties on sales. Eachcompany will commit 15 full-time employees to the collaboration,said Tony Evans, director of business development for Richmond,Calif.-based Onyx. Further financial details of the agreements werenot disclosed

Warner-Lambert, of Morris Plains, N.J., through its Parke-DavisPharmaceutical Research Division in Ann Arbor, Mich., getsexclusive marketing rights to any products coming from the workeverywhere except Japan. The companies will work together inidentifying a Japanese partner for the effort, Evans said.

Evans told BioWorld the cell-cycle collaborators intend to findmolecules that inhibit misregulated kinase activities in cells, whichwill be useful when there is aberrant cell proliferation. Cancer is themost likely application of the findings.

They hope to develop drugs to restore normal growth patterns toabnormally growing cells, or cause those cells to die.

"Onyx's cell cycle program has already generated several therapeutictargets and biological assays that are being used in screening," saidHollings Renton, president and CEO of Onyx. "Parke-Davis brings tothe effort its large compound libraries, outstanding resources formedicinal chemistry and high-throughput screening, strongcapabilities in pharmacology in a variety of therapeutic areas, andclinical development."

Renton said it is the industry's first collaborative effort to focusspecifically on cell-cycle discovery and its potential for controllingabnormal cell growth.

Wendell Wierenga, senior vice president for research at Parke-Davis,said his company has been researching cellular signal transductionfor five years, particularly receptor and cytosolic kinases.

Lilly Deal Specifically Focused On BRCA1

Onyx's deal with Lilly is at least its fourth cancer-relatedcollaboration. Lilly, of Indianapolis, will give research support toOnyx and make a small equity investment.

If the companies identify proteins that interact with the BRCA1 genein the one-year feasibility portion of the agreement, they likely wouldtry to define specific pathways involved in BRCA1-related tumorprogression, as well as points where drugs could intervene.

Onyx would get royalties on sales of any products coming from theresearch. Lilly retains exclusive rights to the gene, which it licensedfrom Myriad Genetics Inc., of Salt Lake City.

Last spring, Onyx entered into two collaborations. In one, thecompany agreed to sponsor the research of Arnold Levine, chairmanof the Department of Molecular Biology at Princeton University andco-discoverer of the p53 tumor suppresser gene. In return, Onyx gotan exclusive option to license all findings coming from the research.

And Onyx's largest deal was with Miles Inc., a subsidiary ofGermany-based Bayer AG. That five-year research and developmentcollaboration, worth up to $75 million to Onyx, is focused ondiscovering small molecules that inhibit ras intracellular signalingpathways. Miles made an equity investment of about $14 million,giving it a stake of about 15 percent in Onyx at the time.

Privately held Onyx was spun off from Chiron Corp., of Emeryville,Calif., to develop cancer therapeutics. Chiron put up $4 million inservices, equipment, facilities use and cash, as well as a technologylicense, for an initial stake of 42.8 percent. Avalon Ventures andthree other venture firms put up another $5 million, and also got a42.8 percent interest at that time.

In June of 1993, Onyx raised $12.2 million in a private financing.Evans said the company, with the Warner-Lambert and Lillyinvestments, has enough cash to last about two and one half years. n

-- Jim Shrine

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