Genzyme Corp. and Xenova Ltd., a U.K.-based drug discoverycompany, have formed a collaboration to develop small-molecule therapeutics for several inflammatory diseases,particularly respiratory diseases.

The three-year collaboration is "significant," but smaller thanthe $20 million research and investment agreement signed byXenova and Genentech Inc. last October, Xenova CEO LouisNisbet told BioWorld.

Genzyme shares (NASDAQ:GENZ) jumped $2.75 to $41.75 onWednesday.

Genzyme of Cambridge, Mass., will contribute recombinanttechnology for producing proteins that drive certain diseaseprocesses, and synthetic chemistry for the isolation andderivation of new compounds.

Xenova of Slough, England, will run the proteins through ahigh-capacity screen, using a proprietary bank of more than22,000 microorganisms, to isolate and characterize smallmolecules that are biologically active in certain diseaseprocesses.

Although the companies would not identify the targetedreceptors and enzymes, inflammatory respiratory diseases thattypically require treatment include asthma and allergies.Xenova will have exclusive rights to the compounds in Europe,and Genzyme will retain exclusive rights in the rest of theworld.

On Monday, Xenova announced that Henri Termeer, Genzyme'schairman and chief executive officer, had joined its board.

"There certainly is potential for more of these biotechnology-to-biotechnology type collaborations as companies begin tobring together complementary areas of expertise," said BonnieFendrock, Genzyme's director of business development.

"We feel that by working with what are clearly maturebiotechnology companies, we are gaining insights andassistance in the rapid development stage," Nisbet said. "TheU.K. biotechnology industry does not have the same experiencebase of developing young companies into more matureorganizations as does the U.S."

Xenova has other collaborative agreements with Hoffmann-LaRoche Inc., Warner-Lambert and Genentech (NYSE:GNE) to developa variety of small-molecule therapeutics; with Monsanto Co. todevelop fungicides; and with FMC Corp. to develop insecticides.

-- Kris Herbst BioWorld Washington Bureau

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