LA JOLLA, Calif. -- Agouron Pharmaceuticals Inc. and Schering-Plough Corp.have announced an agreement under which they will use Agouron drugdesign technology to develop cancer drugs based.on the ras protein.

Mutant forms of this protein, often called the ras oncogene, play akey role in the transformation of normal cells into cancer cells inabout 30 percent of human cancers. They are common in pancreatic andcolorectal cancers and some types of lung cancer.

The companies plan to make drugs that will bind specifically to theras protein, turning it off and stopping tumor growth. Schering hasalready developed several lead compounds.

Schering will pay $6.5 million for a three-year non-exclusive licenseto Agouron's technology. The larger company will be chiefly responsiblefor clinical testing and development of drugs, to which it will havea worldwide marketing license, exclusive except for Agouron's exclusiveoption to co-market the products in North America. Agouron willreceive a royalty on Schering's sales.

Agouron stock (NASDAQ:AGPH) closed at $17.25 on Wednesday, up $2.50.Cetus Corp. and F. Hoffmann-La Roche Inc. have been collaborating on aras oncogene project since 1989, although they have no products inclinical trials yet. The companies are looking for small molecules thatinhibit the interaction between ras and two proteins, GAP and NF1,that may be necessary for ras to function, said Frank McCormick,vice president of research at Cetus.

Cetus and Roche are also using the crystal structure of the ras proteinto develop inhibitors to bind selectively to the ras oncogene, and theyare investigating metabolic pathways regulated by ras proteins in orderto inhibit them selectively in tumor cells.

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