Oncogene Science Inc. and American Home Products Corp. onThursday said they have signed a four-year agreement tojointly develop gene transcription-based drugs targeted atdiseases in the areas of diabetes, immune system modulators,asthma and osteoporosis.

AHP of New York will fully fund all research and development,and its Wyeth-Ayerst Division will have manufacturing rightsand exclusive worldwide marketing rights to drugs developedunder the program. Clinical development will be funded byAHP and guided by a joint committee. Oncogene of Uniondale,N.Y., will receive royalties on sales. No other terms weredisclosed.

Oncogene shares (NASDAQ:ONCS) rose $1.94 to $9.06.

The research will focus on the development of small-moleculedrugs to treat the underlying causes of diseases. Genetranscription is the process by which genes produce proteins.The drugs are expected to switch specific genes in cells on andoff to regulate the production of cellular proteins, said GordonFoulkes, Oncogene's chief scientific officer.

Oncogene has invested nearly $4.5 million over the past fouryears to develop its technology, which it believes could replacerecombinant protein-based therapeutics. Its drug discoveryapproach, which includes a rapid screening method, is aimed atidentifying compounds that affect the transcription of targetgenes.

The technology is already being used in Oncogene'scollaboration with Pfizer Inc. to find cancer drugs. Pfizerinvested $12.5 million over the course of the original five-yeardeal. The two companies renewed and expanded thecollaboration in April.

"Our goal is to get more transcription-based research contracts,"said Robert Van Nostrand, vice president of finance.

Oncogene is in discussions with other companies, he said, andhasn't yet decided what areas it will keep for itself.

For AHP (NYSE:AHP), the deal is its fourth with a biosciencecompany since August, when Wyeth-Ayerst formed a researchcollaboration with Athena Neurosciences Inc. That deal aims todevelop treatments for stroke and head injury based onAthena's technology for blocking the pathological migration ofwhite blood cells to the brain. In September, AHP purchased 60percent of Genetics Institute Inc. for about $666 million. And inNovember, AHP signed a deal with Alza Corp. to developgeneric pharmaceutical products using Alza's drug deliverysystems.

-- Karen Bernstein BioWorld Staff

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