Scynexis Inc. entered a multiyear agreement with Merck & Co. Inc. to discover and develop anti-infective compounds.

Scynexis, of Research Triangle Park, N.C., will use its Medchem-Factory technology to identify drugs against Merck's screening targets. For competitive reasons, Terry Marquardt, director of business development at Scynexis, would not disclose the number or type of targets to be used in the collaboration.

"The thing about this type of transaction is it is one in which Scynexis is contributing chemistry and technology into the project to match Merck's technology," Marquardt said. "Together, we're going forward and developing drugs. There's no up-front payment for us, because this is a collaboration."

Merck, of Whitehouse Station, N.J., would gain exclusive worldwide rights to any products that result from the collaboration, while Scynexis has the potential to receive milestone payments and royalties.

"[Merck] wanted to pursue drugs in this area, and they have an established franchise in this area," Marquardt said. "We had, through previous projects using our Medchem- Factory and other technology, [demonstrated] that we are a good company with which to pursue this."

Medchem-Factory allows the synthesis of compounds in high quantities, and the company said its methods can carry out the directed synthesis of drug-like hit generation compounds, as well as perform hit explosion and lead optimization services. Scynexis's Hit Explorer Operating System serves as the engine to give the company's compounds drug-like properties, Marquardt said.

The company is "hoping for something sooner rather than later," in the collaboration, he said, but as with all discovery work, it is difficult to predict how rapidly the process will move forward.

Scynexis will have some of its 60 U.S.-based employees working on the Merck collaboration. The company also has 40 employees in the UK. Marquardt said the company expects to double the total number of employees by the end of 2003.

"We have other large collaborations, but we are very pleased to be in this collaboration with Merck since they are a top pharmaceutical company and a global company," Marquardt said.

Scynexis reported last week that it raised $29 million privately from a combination of European and U.S. investors. Marquardt told BioWorld Today at the time that the company has about 25 customers currently, about half of which mid-to-large pharmaceutical companies and half are smaller biotechnology companies. (See BioWorld Today, June 21, 2002.)