Athersys Inc. successfully completed its one-year collaboration with Bristol-Myers Squibb Co., prompting the pharmaceutical company to extend and expand the collaboration for three years.

"It's really exciting for the company, because it's the first time that we've expanded a major pharmaceutical deal," Kevin Mendelsohn, Athersys' manager of product development, told BioWorld Today. "We had an initial collaboration with Bristol-Myers in which we were delivering cell lines."

The extended collaboration requires Cleveland-based Athersys again to deliver cell lines that New York-based Bristol-Myers Squibb will use in its drug screening program, Mendelsohn said. Athersys has a guaranteed annual minimum on the number of cells lines it will provide.

"It's a substantial number of cells lines up from what the original deal called for, so it's a pretty major expansion," he said.

Athersys will agree with Bristol-Myers Squibb on certain validated targets and deliver cell lines that express the targets, he said. BMS then will use combinatorial chemistry expertise to develop small-molecule drug candidates.

In return for its work, Athersys will receive license fees for each target cell line; screening, preclinical and clinical milestones; and ultimately, royalties, although Mendelsohn declined to be more specific.

"The collaboration will cover a number of therapeutic areas," Mendelsohn said, noting that they are areas of interest to Bristol-Myers Squibb.

In the collaboration with Bristol-Myers Squibb, Athersys is using its RAGE (Random Activation of Gene Expression) technology, one of its two platform technologies. RAGE is a gene expression system that is designed to have the ability to produce protein from virtually every gene in the human genome, the company said, without requiring the cloning of individual genes or the use of cDNA libraries. The other platform is the SMC (Synthetic Microchromosome) vector system, which is designed to deliver multiple therapeutic genes in gene therapy applications.

"For us as a company, this deal expands our own development program," Mendelsohn said. "We look at these deals with pharmas [to allow us] to continue the development of our own drug programs."

Founded in 1995, Athersys is still in the preclinical and early discovery stage, but Mendelsohn said the company plans to have a candidate in the clinic within two years. Athersys is focused on programs in oncology, inflammation and metabolic and endocrine disorders, as well as some central nervous system areas.

Athersys has collaborations with the Cleveland Clinic Foundation, of Cleveland; Pfizer Inc., of New York; 3-Dimensional Pharmaceuticals of Yardley, Pa.; and Medarex Inc., of Princeton, N.J.

In May, Athersys completed a private placement totaling $16.2 million to be used for about a dozen projects. President and CEO Gil Van Bokkelen said at the time that the company had raised about $100 million since its inception and, as of May, had about $60 million in cash, which he projected would last for several years. (See BioWorld Today, May 13, 2002.)