Chiron Corp. and Houghten Pharmaceuticals Inc. announcedTuesday at the Hambrecht & Quist Life Sciences Conference inSan Francisco that they have formed a new company, ChironMimotopes Peptide Systems (CMPS).

CMPS is the result of a merger between Chiron Mimotopes Pty.Ltd. and Multiple Peptide Systems, wholly owned subsidiaries,respectively, of Chiron (NASDAQ:CHIR) of Emeryville, Calif., andSan Diego-based Houghten. The new company will manufactureand sell peptides and peptide libraries to the worldwideresearch community.

The companies said CMPS's combined portfolio will represent abroad range of approaches to creating diverse libraries ofpeptide compounds, which they said "may significantlyaccelerate the process of drug discovery." The two subsidiarieshad aggregate revenues of $7 million last year.

Chiron and privately held Houghten also announced theexchange of patent rights concerning peptide synthesis.Houghten will receive non-exclusive rights to practice underChiron's peptide diversity technology patents in exchange forroyalty payments, and Houghten has granted Chiron a royalty-bearing, non-exclusive option to its patents and patentapplication in peptide synthesis.

Houghten founder Richard Houghten told BioWorld that thetechnologies being exchanged by the companies are synergistic.Both companies' patents cover methods of patent synthesis, hesaid, but Houghten's patent covers a technology for theproduction of large quantities of peptides, while Chiron'spatents apply to a technology for producing small quantities ofpeptides.

Houghten said the production of millions of peptides and theirpreparation into a library format allows researchers tosystematically evaluate the biological activity of millions ofpotentially therapeutic agents. While the combined portfolio oftechnologies will strengthen the companies' individual drug-discovery activities, he continued, CMPS will manufacture andsell peptides and peptide libraries to independent researchers.

CMPS will be 75 percent owned by Chiron and 25 percentowned by Houghten. Chiron will appoint three directors to thecompany's board, including its chairman, and Houghten willappoint two members. CMPS will be headquartered in SanDiego (the original site of Houghten's subsidiary, MultiplePeptide Systems) and Clayton, Victoria, near Melbourne,Australia (the original site of Chiron Mimotopes Pty. Ltd.).

Chiron acquired Chiron Mimotopes Pty. Ltd. fromCommonwealth Serum Laboratories of Melbourne in 1991.According to a Houghten representative, Chiron has a strongpresence in the Far East and Europe in the sale of peptides andpeptide libraries, while Houghten has a large share of the NorthAmerican market. Multiple Peptide Systems is one of the fewcommercial facilities in the U.S. certified under FDA's GoodManufacturing Practices Guidelines for the manufacture ofpeptides for commercial research purposes.

-- Karl A. Thiel Associate Editor

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