PARAMUS, N.J. -- Neurogenetic Corp. said Wednesday that itsigned its first joint research agreement to discover anddevelop drugs for treating central and peripheral nervoussystem disorders. The four-year pact with Eli Lilly & Co. ofIndianapolis includes undisclosed funding of research andlicensing of some of Neurogenetics' previous discoveries.

Lilly also agreed separately to join a larger group of investorsin a private equity financing, totaling between $7.5 million and$10 million, in Neurogenetic.

As part of the research agreement, Lilly (NYSE:LLY) made anundisclosed payment for an exclusive worldwide license toNeurogenetic's cloned human serotonin neuroreceptors. Suchneuroreceptors are protein switches of the nervous system thataffect migraine headaches, depression, anxiety, sleep disorders,sexual dysfunction and cardiovascular disease.

Lilly will also fund research at Neurogenetic that aims tointegrate these cloned receptors into Lilly's ongoing research.Neurogenetic would receive royalties on sales of any productsresulting from the collaboration. The companies declined todisclose details of the agreement.

Lilly declined to discuss its own neuroreceptor researchprogram. Lilly last June signed a research agreement withAllelix Biopharmaceuticals of Mississauga, Ontario, to isolateand clone human genes coding for excitatory amino acidreceptors, which could be useful in treating strokes, epilepsyand neurodegenerative diseases.

Neurogenetic said it has cloned 25 neuroreceptors, including 11that it considers novel, for serotonin and other G protein-coupled receptors. Neurogenetic announced last June that it hadcloned human serotonin receptor 5HT 1D, which is believed tobe involved in controlling migraine headaches.

Neurogenetic's new round of equity financing is expected toclose before the end of March. Participants, besides Lilly,include Matuschka Venture Partners, Oxford Partners, AetnaLife & Casualty, Athena Venture Partners, Alan PatricofAssociates, Adler & Co., TVM Techno Venture Management andFostin Capital. Other investors may also join, said Dr. TodCooperman, Neurogenetic's director of corporate development.

Neurogenetic, founded in 1987, has raised a total of $6 millionin prior rounds of financing, Cooperman said.

The company is in early talks with potential partners todevelop other receptors. A second area of Neurogenetics'research is adrenergic receptors, which target prostateenlargement, nasal congestion, hypertension and asthma.

The company also seeks collaborators to develop anti-psychoticdrugs based on dopamine receptors and drugs involvingpeptide receptors.

-- Karen Bernstein BioWorld Staff

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