Diversa Corp. entered an agreement to further develop an anti-infective compound discovered by GlaxoSmithKline plc.

"It's a really wonderful fit because Diversa is focused on anti-infectives as its internal development program," Jay Short, Diversa's president and CEO, told BioWorld Today. "Of course, we're going to be working with other pharmaceutical partners in other areas such as oncology, metabolic disease and immunology, but as a core targeted space in our pharmaceutical division, we're definitely going to take anti-infectives forward."

The deal is the third between San Diego-based Diversa and GlaxoSmithKline, meaning the latter is well aware of the former's capabilities. A prior relationship led to Diversa's development of an antifungal program from its Soradins platform of molecules for Candida, and Diversa's senior vice president of pharmaceutical research, Gary Woodnutt, formerly worked as GSK's vice president of anti-infectives.

"We've had multiple deals with a lot of our partners," Short said, "so that seems to be the trend - that we walk toward larger and larger deals with our partners. And that's exciting because it's one more validation of our pharmaceutical platform in our pharmaceutical division, which is coming along."

Diversa will have the primary responsibility to develop the chemistry processes required to advance the unnamed compound into clinical development.

"We have a portfolio of some unique and patented technologies here at Diversa that they recognized could really make a tremendous difference in terms of being able to advance this molecule into the clinic," he said. The company, which will receive payments for its early research, uses its integrated technologies to access microbial genomics.

Upon achievement of specific performance criteria, GSK could opt to further develop the compound and obtain exclusive worldwide commercialization rights in exchange for undisclosed milestone payments, option and license fees and royalties to Diversa. If GlaxoSmithKline decides not to exercise its option, Diversa would gain development and commercialization rights to the compound in exchange for royalties to its London-based partner.

"The nice thing about this drug is that it certainly exceeds all of GlaxoSmithKline's internal thresholds," Short said. "So it has a very large value opportunity. But the real question is where are they going to be as an organization in the area of anti-infectives? Obviously, we're in anti-infectives, so we're willing to catch it if they decide they're not going to take it forward. But right now it's big enough that I think they will want to hang on."

Beyond Diversa's anti-infective programs, Short said that the company has preclinical programs in other undisclosed areas. He added that Diversa would continue to develop its business in oncology, metabolic disease and immunology, some of which he expects to produce programs that would be partnered. Existing pharmaceutical partners include Medarex Inc., of Princeton, N.J.; XOMA Ltd., of Berkeley, Calif.; and Syngenta AG, of Basel, Switzerland. Diversa also is working within the framework of biodefense agreements related to government contracts with the National Institutes of Health in Bethesda, Md., and the Department of Defense. Three of the four grants deal with proteomics related to the development of antibodies.

Outside of pharmaceuticals, its other business unit is focused on agriculture, chemicals and industrial applications. Short said revenue from that division is earmarked to support further drug research in Diversa's pharmaceutical division.

"There's quite a lot of activity bubbling up," Short said. "We feel this is another feather in the cap for our pharmaceutical division."

On Monday, Diversa's stock (NASDAQ:DVSA) gained 48 cents to close at $9.21.