Neurocrine Biosciences Inc. signed a deal Thursday worth more than$30 million with Janssen Pharmaceutica N.V. to discover anddevelop drugs to treat various psychiatric disorders.

The partners will focus on development of small molecules that actas antagonists at the corticotropin releasing factor (CRF) receptor.Products coming out of the collaboration would compete withvarious anti-anxiety and anti-depressant drugs, but have reduced sideeffects, according to Gary Lyons, president and CEO of San Diego-based Neurocrine.

"It's a different approach, a different target directly involved in thedisease," Lyons said of blocking CRF. "It's a distinct mechanism ofaction. These drugs act upon different families of receptors."

Privately held Neurocrine will get an initial licensing fee, researchfunding for at least three years, and milestone payments. Also,Johnson & Johnson Development Corp. will make a $5 millionequity investment in Neurocrine, in two rounds. Both Janssen, ofBelgium, and Johnson & Johnson Development are divisions of NewBrunswick, N.J.-based Johnson & Johnson.

Janssen is responsible for preclinical and clinical expenses, inaddition to the payments to Neurocrine, Lyons said. Neurocrine hasan option to co-promote products in North America, and will receiveroyalties on sales worldwide.

Two of the important parts of the deal to Neurocrine, Lyons toldBioWorld, are the co-promotion rights in North America and that thecompany will get rights to certain CRF antagonists, as well as CRFbinding protein antagonists, outside the areas of psychiatricdisorders.

"We know there are multiple receptors," Lyons said. "One area ofinterest to us is inflammation. This accelerates our development inother areas by two or three years."

Neurocrine founder Wylie Vale, professor of peptide biology at theSalk Institute, first identified the neuropeptide. Vale, who's also thecompany's chief scientist, neuroendocrinology, cloned andcharacterized the CRF molecule, which modulates the body'sresponse to stress. Since then institute and company scientists clonedthe human CRF receptors.

"It's a very potent molecule," Lyons said. "We know transgenics thatproduce high levels of CRF are very anxious, and have all thesymptomology of what you see in patients with anxiety anddepression. We've gone on to block CRF in those models, and wecan show reversal of anxiety and depression."

Lyons expects compounds blocking CRF receptors also would beeffective against nicotine and alcohol as well as cocaine withdrawal.

Lyons said there potentially are a number of therapeutic productsthat could result from the CRF program. One strategy involvesincreasing CRF selectively in the brain to treat dementia associatedwith Alzheimer's disease.

The Janssen deal was Neurocrine's first major partnership. Lyonssaid "we undoubtedly will do one more collaboration by the end ofthis year.

"Our plan is to stay private until the markets improve, and thisfinancing allows us more time to build value in the company." n

-- Jim Shrine

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