By Randall Osborne

West Coast Editor

Quick and versatile technology for nailing down drug leads helped NeoGenesis Drug Discovery Inc. nail down a potential $25 million expansion of its deal for antivirals with Schering-Plough Corp., said Satish Jindal, president and chief scientific officer of NeoGenesis.

¿Within six months, we were able to give them a couple of high-quality drug leads, and we are developing at least one,¿ Jindal told BioWorld Today.

Under the terms of the expansion, privately held NeoGenesis, of Cambridge, Mass., gets a $5 million equity investment from Madison, N.J.-based Schering-Plough, which also will provide research and development funding ¿on average, of about $4 million per year¿ for a period of up to five years.

¿I have no question in my mind it will be renewed [after five years], if we do a good job,¿ Jindal said, adding that the deal also includes preclinical, clinical and regulatory milestone payments, as well as royalties on resulting products.

The deal covers ¿initial hit difficulty, drug lead optimization, and also involvement in drug candidates¿ in multiple areas, Jindal said.

¿This is quite interesting, because the milestones are coming in very early on, as we deliver initial hits and leads,¿ he said. ¿They are not only clinical.¿

NeoGenesis, founded in 1997, uses the Automated Ligand Identification System to screen targets, along with its neoMorph compound library, consisting of more than 10 million diverse drug-like compounds, to find small-molecule ligands. The company has raised $40 million since it started.

Jindal said the Schering-Plough expansion is ¿not the biggest deal¿ in the company¿s history, but is satisfying because it proves the worth of the NeoGenesis approach after a period of testing in the first part of the agreement.

¿The impressive thing is the speed of this technology, and how generic it can be,¿ he said. ¿It can really complement existing technologies against any target.¿

NeoGenesis also has deals with Biogen Inc., of Cambridge, Mass.; Oxford GlycoSciences plc, of Oxford, UK; and Celltech Group plc, of Slough, UK, among others. (See BioWorld Today, July 10, 2001, and July 13, 2001.)