BioWorld International Correspondent

LONDON - Astex Technology Ltd. agreed to a multi-target drug discovery deal with Boehringer Ingelheim International GmbH, in which each target could yield up to $45 million in research and development costs and milestones for Astex, up to the point of commercialization.

The three-year alliance covers various undisclosed disease areas, and Astex will receive an up-front fee and royalties on any marketed products.

At the same time, Cambridge, UK-based Astex signaled that it would conduct an initial public offering if the opportunity arose.

Jeremy Carmichael, associate director, business development at Astex, said that "$45 million per target is bigger than any of our previous deals, and I believe it shows understanding of the value inherent in our approach is growing."

The company has a fragment-based approach to structure-based drug design that involves applying high-throughput X-ray crystallography to solve protein structures and using the structures to detect binding of low-molecular-weight drug fragments, which are then optimized into leads. The company claims to have found hits for targets that are intractable to other techniques.

Boehringer Ingelheim, of Ingelheim, Germany, will be responsible for all clinical development, and has an option to obtain worldwide marketing rights to all the compounds identified.

Astex adds the collaboration to deals with London-based AstraZeneca plc, Berlin-based Schering AG and Tokyo-based Mitsubishi Pharma Corp. The four year-old company received its first milestone payment from AstraZeneca in September, for work in Alzheimer's disease.

In addition, Astex has a number of research agreements focused on solving the structures of human cytochrome P450s - enzymes involved in metabolizing drugs and the cause of attrition in the drug development process.

Astex's in-house programs are focused on oncology, with a compound due to enter the clinic in 2005. In October, it acquired metaGen Pharmaceuticals GmbH, of Berlin, to provide it with drug development capabilities in oncology. Astex has £30 million (US$52 million) in cash, which, on the current plan, would last until 2006. But, Carmichael told BioWorld International, "We need public monies to advance our clinical program. We would hope to be ready [for an IPO] if the opportunity arises."

The successful IPO of Ark Therapeutics Group plc, raising £55 million earlier this month, has increased Astex's optimism. But Carmichael acknowledges that the market has been looking for companies with late-stage products.

"We are starting to show investors that our novel drug discovery technology can constantly refill our pipeline," he said. "Our products are almost in the clinic, and we have received our first milestone from a partner. We would hope this can shift sentiments [in the market]."