Washington Editor

MethylGene Inc. could earn $33.75 million in a deal with Merck-Frosst Canada & Co. to develop a small-molecule inhibitor program against bacterial beta-lactamases to fight antibiotic resistance.

For MethylGene, a six-year-old private firm, the opportunity to partner with Merck-Frosst, the Canadian division of Merck & Co. Inc., of Whitehouse Station, N.J., proves validation of the young company's chemistry while giving it a morale boost in the knowledge that it has signed a deal with a company like Merck, Donald Corcoran, president and CEO of MethylGene, told BioWorld Today.

"We're a serious chemistry company so to be able to work with Merck is a validation statement for MethylGene," Corcoran said. Located in Montreal, MethylGene employs 80 people.

While specific financial terms of the agreement were not released, Corcoran said Merck-Frosst paid MethylGene $4 million in up-front cash. Merck-Frosst agreed to carry candidates through the clinic and to handle worldwide commercialization and marketing. MethylGene would receive royalties on worldwide sales of any products resulting from the collaboration.

MethylGene brings its medicinal chemistry expertise to the deal, Corcoran said. "At the least, we'll do the initial medicinal chemistry to optimize the compounds that we've already made," he said. "Merck has the in vitro and in vivo microbiology to evaluate these compounds in a more rigorous and serious fashion than we've been able to do as a small company."

By way of its chemistry capabilities, MethylGene has designed small molecules that inhibit multiple isoforms of beta-lactamases, an enzyme that causes resistance to beta-lactam antibiotics. "Beta-lactam antibiotics are still a huge class, probably worth about $10 billion in worldwide sales," Corcoran said.

They are represented in three classes called penicillins (Class A), carbapenems (Class B) and cephalosporins (Class C).

"There are drugs on the market that are effective against the Class A enzyme, or penicillins," he said. "So we built a molecule to hit both Class A and Class C. Because some Class A activities appear to impact carbapenems, we also paired them with carbapenems. So in the same compound we built broader activity across multiple isoforms for this enzyme."

When used in combination with a beta-lactam antibiotic, the compounds can prevent resistance to the antibiotic and hence, enhance the activity and prolong the useful life of the antibiotic, the company said.

Corcoran believes a product produced from the collaboration could reach the investigational new drug application stage in about two years.

Meanwhile, MethylGene's lead candidate is an anticancer compound called MG98. Partnered with MGI Pharma Inc., of Minneapolis, for North American rights, and British Biotech plc, of Cambridge, UK, for European rights, MG98 targets the enzyme DNA methyltransferase. MG98 is in Phase I studies.

The second product is MGCD0103, an orally active isoform selective small-molecule inhibitor of the histone deacetylase enzyme. MethylGene expects to file an IND this year.

Since taking its first steps in 1997, MethylGene has raised about $29 million through venture capital funding. Corcoran said the company is looking to U.S. venture capitalists for a planned $10 million to $20 million financing over the next few months.