Eli Lilly Canada Inc. will acquire a minority equity stake inAllelix Biopharmaceuticals Inc. as part of an agreementexpanding their research collaboration on compounds involvedin central nervous system disorders, Allelix announced onTuesday.

As part of the three-year extension of the agreement, Allelixwill receive almost US$6 million in research funding inaddition to the undisclosed equity investment, said JerryOrmiston, business development coordinator at Allelix. Lillyhad already put about $2 million into the collaboration, whichwas announced in June 1990.

The equity stake is Lilly's first in the privately held Torontocompany. Other details were not disclosed.

The research is focused on excitatory amino acid (EAA)receptors, which are found on the surface of nerve cells in thebody. Aberrations in the release of EAA receptors can causebrain malfunction or incorrect communication between nerves.

"Our role is to clone the genes and put them into systemswhere they can be expressed and used by Lilly in their CNSresearch group," said Ormiston. He said products to preventneuronal cell death and anti-epileptic applications couldemerge from the research.

Among its other programs, Allelix has a preclinicalcollaboration with Glaxo Canada for use of parathyroidhormone in osteoporosis.

The company also is developing an anti-HIV therapeutic as a"gene targeted pharmaceutical," focusing on peptides andanalogs that would inhibit replication of the virus.

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