Agouron Pharmaceuticals Inc. announced Wednesday that itreceived a $1.8 million NIH grant to begin a three-year AIDSresearch collaboration with NeXagen Inc. and Selectide Corp.

The three companies will focus on the discovery of novelchemical compounds that block reverse transcriptase, anenzyme required for replication of the HIV virus. Commercialdetails of the deal were not released.

According to Agouron spokeswoman Donna Nichols, the SanDiego company will provide the structure of the target enzyme,reverse transcriptase, while NeXagen and Selectide will usetheir technologies to find leads for possible drug candidates.

Agouron will use its core technology in rational drug design topursue any leads that might result from the collaboration.

"The collaboration provides a perfect occasion to couple theexploratory power of vast peptide and oligonucleotide librarieswith our structure-based approach to chemical mimetics andde novo drug design," said Peter Johnson, Agouron's presidentand chief executive officer.

NeXagen will contribute its SELEX (systematic evolution ofligands by exponential enrichment) technology. With SELEX,novel oligonucleotide ligands with extremely high affinity andspecificity for molecular targets can be identified and used torapidly identify lead compounds.

Selectide,of Tucson, Ariz., is contributing its Selectide Process,which can rapidly synthesize and screen large peptide libraries.This technology can help to significantly speed and improve thesearch for reverse transcriptase-blocking compounds.

"The NIH has obviously recognized this as a unique opportunityto link three companies who have different technologies thatcould result in identifying and designing novel compounds totreat HIV," said Pat Mahaffy, president and chief executive ofNeXagen, which is based in Boulder, Colo.

Agouron has received several NIH grants to pursue AIDSresearch. According to Nichols, the company recently reachedthe end of a $5.5 million grant it used in a project with Eli Lilly& Co. to research the HIV protease enzyme, which, like reversetranscriptase, is necessary for replication of the HIV virus. Thecompany also has another NIH grant pending for HIV research,but declined to disclose details.

The company's stock (NASDAQ:AGPH) was up 50 cents a shareon Wednesday, closing at $10.50.

-- Michelle Slade Associate Editor

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