Affinium Pharmaceuticals Inc. entered an agreement to acquire compounds from GlaxoSmithKline plc, which in turn will receive an equity stake in the nearly three-year-old company working on antibiotics.

"We're interested in acquiring programs that have a strong strategic fit but are later stage in terms of where we are in our own internal efforts," Affinium CEO John Mendlein told BioWorld Today. "So in a way, we're accelerating a forward integration of the company with this acquisition."

Specifically, Affinium is gaining worldwide discovery, development, marketing and distribution rights to compounds generated in London-based GlaxoSmithKline's antibacterial research program. Mendlein said GSK gained a share of less than 20 percent in the privately held company. He added that the pharmaceutical firm would likely add a member to Affinium's seven-member board.

Other terms were not disclosed by the Toronto-based business, which has raised $33 million since its August 2001 inception.

The acquisition includes late-stage leads and intellectual property on high-resolution target structures for a novel target, and multiple series of compounds resulting from lead optimization. Affinium, which bills itself as a structure-guided drug discovery company, said the inhibitors could potentially be useful in treating serious staphylococcal infections, including methicillin-resistant Staphylococci infections.

Hours after reporting the purchase from GlaxoSmithKline, Affinium entered an alliance with Albany Molecular Research Inc., which will provide chemistry-based drug discovery expertise to augment Affinium's newly acquired anti-infective chemistry programs. The Albany, N.Y.-based company will receive fees based on the number of scientists in its chemistry team working on Affinium projects. Albany Molecular also may receive success fees for meeting certain development milestones on new compounds and downstream revenues for certain commercial products. Other terms were not disclosed.

While still in GlaxoSmithKline's hands, existing compounds demonstrated high antibacterial activity and in vivo efficacy in animal models. Mendlein said the compounds also have shown inhibitory action against organisms grouped into part of today's bioterrorism reality.

"This asset was derived from a structure-based paradigm," he said. "GlaxoSmithKline's structural biology scientists had the crystals for targets and could see the inhibitors bound for the targets, which can lead to new ideas for optimization. It was a perfect fit within our portfolio, because it was very complementary in terms of how these particular drugs were discovered and was further along in the discovery process - probably a year or so away from the clinic."

Mendlein said the acquisition from GSK could produce a niche antibiotic that could generate $200 million in sales.

Affinium said its ProteoChem technology system facilitates a number of tasks - high-throughput target production, determination of target function, and visualization of target structure with bound hits and leads to accelerate the chemistry process. Its processes include mass spectrometry, nuclear magnetic resonance spectroscopy and X-ray crystallography technologies from Bruker Daltonics Inc. and Bruker BioSpin Corp., both of Billerica, Mass., as well as Madison, Wis.-based Bruker AXS Inc. The company also employs discovery capabilities belonging to Cambridge, Mass.-based Vertex Pharmaceuticals Inc. in advancing its internal drug discovery efforts.

Affinium's small-molecule discovery programs have produced a number of active chemicals belonging to a new class of broad-spectrum antibiotics, as well as compounds for an undisclosed virus.

"Our compounds have promising oral bioavailability, but if we need to increase their solubility, we can look at how the inhibitor is bound to the target and then see opportunities to add groups that we believe would increase the solubility of the compounds," Mendlein said. "We can make the co-structures of the bound inhibitors as well as the new inhibitors and see exactly what they look like on the target, to make sure that we are not interfering with the basic processes of affinity between the target and these small-molecule inhibitors."

Beyond its internal work, Affinium is working with partners as well.

Nearly a year ago, the company entered a three-year alliance with Pfizer Inc. for structure-based protein production in a deal valued at up to $30 million, excluding royalties. New York-based Pfizer is providing undisclosed targets from various enzyme classes, funding for research and development and database licenses, potential discovery and clinical milestones, and royalties. Affinium is working to produce proteins for high-throughput screening, discover the physiologic relevance of the targets using protein-protein interactions, and determine the 3-dimensional structure of the target. (See BioWorld Today, May 9, 2002.)

Affinium also is involved in a viral proteomics program, for which it was awarded a $7 million grant from Genome Canada.

"Our business plan is to use our R&D engine to attract collaborators like Pfizer to produce revenues that offset burn in the early years of the company," Mendlein said. "In the latter years of the company, we'd like to do more development-stage deals with big pharma from programs that we develop internally or in-license."

The three Bruker companies, whose founding firm is Billerica-based Bruker NMR, are among Affinium's investors, as is Vertex. Other investors in the company, originally known as Integrative Proteomics Inc., include the Lombard Odier Immunology Fund, Schweizerhall Holding AG, Genesys Capital Partners Inc. and HBM BioVentures.