In an effort to develop new antibiotics, Essential Therapeutics Inc. entered into a collaborative agreement with Fujisawa Pharmaceutical Co. Ltd.

Essential will use its technology to develop assay systems for the discovery of antibiotics, and will perform high-throughput screening of compounds in Fujisawa's library.

"It's the core expertise in antibiotics and anti-infectives that we've been known for since 1992 that they found appealing," said Nancy Wetherbee, Essential's vice president of business development. "Our technology portfolio is quite broad, but Fujisawa does not want us to release this particular technology that was selected, other than that it is within our antibiotics franchise."

Waltham, Mass.-based Essential will screen the compounds through a service agreement with its subcontractor, Marlborough, Mass.-based Cetek Corp.

Fujisawa will conduct lead generation and lead optimization. The Osaka, Japan-based firm will retain exclusive worldwide development, manufacturing and marketing rights on resulting products.

If Fujisawa decides not to further develop a compound, Essential would retain development rights.

"It's a win-win situation, because we do believe more than one molecule will be brought forward in the partnership," Wetherbee said. "As a development-stage company, it's very important for us to have the capability of potential in-licensing compounds."

While specific milestone payment and royalty schedule details were not disclosed, Wetherbee said Essential received an up-front technology access fee. She added that Essential would also receive research and development milestone payments, traditional full-time-equivalent funding and clinical milestone payments, in addition to royalties.

"There are a lot of opportunities for us early in the pipeline based on certain achievement criteria to get recognized for the value of this technology," Wetherbee said.

Beyond its newest collaboration, Essential remains involved in two other development collaborations as well as the development of its own blood-count-management drug. Two months ago, the company took steps to focus primarily on those three ventures.

In June, Essential eliminated several early discovery programs in an effort to increase attention to those further along. In the process, the company said that the cutbacks involved projects that employed about 80 people, though Essential was not specific as to an exact number of layoffs.

At the time, CEO Mark Skaletsky said Essential had sufficient cash to support multiple clinical programs for at least two years. Its continuing development initiatives include ETRX-101, a small molecule in Phase I trials for restoring lowered blood cell counts due to myelosuppression. Therapeutic targets could include patients at risk for infection or other complications after cancer chemotherapy or bone marrow transplantation.

Wetherbee said Essential planned to begin three Phase II trials before year's end. The randomized, placebo-controlled studies are designed to study the effects of ETRX-101 on red blood cell, white blood cell and platelet lineages in patients receiving chemotherapy.

A collaboration continues with New Brunswick, N.J.-based Johnson & Johnson to develop cephalosporins designed to target resistant bacteria. During in vitro testing, a candidate now in Phase I showed activity against antibiotic-resistant Gram-positive bacteria such as methicillin-resistant staphylococcus, penicillin-resistant streptococcus and vancomycin-resistant Enterococcus faecalis. Another candidate remains in preclinical testing.

Another collaboration, with Tokyo-based Daiichi Pharmaceutical Co. Ltd., remains in lead-optimization development of efflux pump inhibitors to overcome resistance mechanisms in bacteria and fungi.

Essential's stock (NASDAQ:ETRX) gained 8 cents Friday to close at $1.22.