Amylin Pharmaceuticals Inc., which is best known for its work in metabolic disorders, is moving into the central nervous system space through the formation of a new firm, Psylin Neurosciences Inc., in collaboration with PsychoGenics Inc.

Psylin, to be owned by both companies on a 50-50 basis, will focus on discovering and developing peptide hormones against psychiatric disorders using compounds from Amylin's Phormol polypeptide hormone library combined with PsychoGenics' drug discovery technologies. Psylin will hold rights to any drug candidates that emerge from those discovery efforts.

"It's a matter of focus for us," said Alice Bahner, executive director of investor relations at Amylin, which markets the diabetes drugs Byetta (exenatide, with Indianapolis-based Eli Lilly & Co.) and Smylin and is developing compounds for obesity. But molecules in the Phormol library have broader reaching capabilities, and "we wanted to be able to explore those opportunities."

Amylin and PsychoGenics, a privately held firm that specializes in preclinical behavioral neurobiology, have worked together "for the past 18 months or so," Bahner told BioWorld Today, and have come up with "exciting preclinical data that relate to the utility of some compounds" in CNS disorders.

"We wanted to build on the findings," she added, "and this structure will allow an environment to focus on those."

To support Psylin's activities, Amylin and PsychoGenics contributed equally to an undisclosed Series A financing, which is expected to sustain the new firm's operations for about two years. Work is expected to start at the discovery stage, and the company has not yet announced any specific timeline for reaching the clinic.

"It's very early days," Bahner said. "We have lead optimization; we'll eventually work toward a clinical candidate."

Psylin will be located in San Diego, near Amylin, though the company will have its own management and board, as set up by both founding firms.

Amylin, which reported its fourth-quarter earnings Tuesday afternoon, posted a net loss of $58.4 million, or 45 cents per share for the three months ending Dec. 31, 2006. Net product sales totaled about $150.6 million, with $137 million of that coming from Byetta sales.

Shares of Amylin (NASDAQ:AMLN) rose 50 cents Tuesday to close at $39.01.

For PsychoGenics, the deal falls in line with other types of partnerships signed in the last year to discover drugs for neurological and psychiatric disorders. In December, the Tarrytown, N.Y.-based firm entered a collaboration to use its platform on drug candidates provided by Lilly. In that deal, either company has the option to exclusively develop any drug candidate emerging from partnership, while the nondeveloping company would be entitled to milestones and royalties.

Also last year, PsychoGenics partnered its discovery platform with Tokyo-based Sosei Co. Ltd.'s drug reprofiling program to develop new CNS therapies from compounds that previously were discontinued as drug candidates for reasons other than toxicity. PsychoGenics also is working with the Spinal Muscular Atrophy Foundation to establish and behaviorally phenotype transgenic in vivo models of SMA for testing potential therapeutics.