Sphinx Pharmaceuticals Corp. said Monday that it hasestablished a four-year collaborative partnership with EliLilly and Co. to discover and develop a novel class of drugs totreat cardiovascular diseases, inflammatory disorders andcentral nervous system diseases.

The compounds, based on Sphinx's lipid second messengerprogram, will focus on controlling a family of enzymes calledprotein kinase C (PKC), which play a key role in regulatingcellular functions such as cell proliferation, plateletaggregation and white blood cell activation. PKCs are regulatedby lipid second messengers.

Lipid second messengers are so called because they're releasedinside the cell, said Carson Loomis, vice president ofbiochemical research and co-founder of Sphinx. Firstmessengers come to cell membranes, where receptorstranslate their signals across the membrane. Secondmessengers, composed of molecules broken down from themembrane itself, then carry the signal inside the cell, wherethe messengers interact with specific enzymes.

Lilly will make a $4 million equity investment in privatelyheld Sphinx, which represents about 9 percent of Sphinx'sshares outstanding. Lilly will provide research support fundingfor and collaborate with Sphinx on the development ofinhibitors or activators of PKC for select disease targets.Further financial terms weren't disclosed.

Lilly will have the right to develop and market compounds forcentral nervous system diseases, cardiovascular diseases,renal diseases, immunological diseases, arthritis,inflammatory bowel disease, septic shock and diabetes.

Sphinx will retain the right to develop PKC compounds to treatdermatologic and ocular diseases, cancer, infectious diseasesand respiratory disorders such as asthma.

The Durham, N.C., company also will receive milestonepayments and royalties on sales of all products resulting fromthe collaboration.

Sphinx previously raised $11 million in two rounds offinancing since 1988. Investors are Oxford Partners, MatuschkaVenture Partners, Intersouth Partners, Rothschild VenturesInc., S.R. One Ltd. and John Hadley Ventures.

-- Karen Bernstein BioWorld Staff

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