Calling it the biggest collaboration in its history, Anadys signed a deal with F. Hoffmann-La Roche Ltd., bringing its chemistry capabilities to a Roche oncology target.

San Diego-based Anadys will use its structure-assisted drug design and high-output medicinal chemistry to advance lead compounds identified by Roche. Financial terms were not disclosed, but the agreement has plenty of meaning for Anadys, both financially and as a benchmark for where the company is and where it wants to be, said its vice president of corporate development and strategy, Michael Kamdar.

"This is a very significant collaboration for us," he told BioWorld Today. "It involves a multimillion-dollar equity investment and it also is a significant collaboration from the standpoint of [full-time equivalent] funding. And we will also receive milestone payments and royalties on compounds that are progressed forward."

Kamdar, who helped broker the deal, said Basel, Switzerland-based Roche hand-picked Anadys for the project.

"Roche has a priority oncology target that it was interested in identifying a partner for that could bring some discovery resources," he said. "My understanding was that they looked at a lot of different companies and at the end of the day were very impressed with the caliber of the chemistry resources Anadys could bring to bear."

Besides being Anadys' largest deal, it is a step ahead of other deals that begin with straight discovery. In this case, Roche already has done lead discovery.

"This is more of a lead-optimization deal," Kamdar said. "It's more of an advanced operation where there are lead compounds already identified.

"We've put together other significant collaborations [recently]," he added. "Gilead first, and this one further elevates the organization. It takes us further downstream in the development process."

In June, Anadys and Gilead Sciences Inc., of Foster City, Calif., entered a deal to discover antiviral compounds using Anadys' technology and an undisclosed viral target from Gilead. That deal also included an up-front payment, research funding and potential milestone payments and royalties. (See BioWorld Today, June 11, 2002.)

The plan for the Roche deal is to generate a preclinical candidate in the next 12 to 18 months, Kamdar said. But once that's done, it doesn't mean the companies will stop working together.

"We want to build a long-term relationship [with Roche] based on the chemistry ability we have at Anadys," Kamdar said. "And this deal could potentially expand relative to the target or other targets and other lead-optimization programs. That's our hope."

At the end of July, Anadys raised $38.3 million in its Series C round. Throw in the up-front payments and research funding from Gilead and Roche, and Anadys has had an enriching couple of months.

"We are very happy with the level of interest from an investment standpoint and the quality of investors that have invested in the company," Kamdar said. "Hepatitis C and antibacterials are our core focus, but our resources and capabilities expand into other areas. [The Roche deal] is a prime example of that."