DUBLIN, Ireland - GPC Biotech AG entered a second drug discovery alliance with Karo Bio AB focused on identifying new classes of broad-spectrum antibiotics that act on novel genomics-derived targets.

The agreement builds on an accord GPC signed last September with Novalon Pharmaceutical Corp., of Durham, N.C., a company Stockholm, Sweden-based Karo Bio acquired in May. Karo Bio USA, as Novalon is now called, will develop screening assays based on its proprietary BioKey technology for up to 15 antibacterial targets identified and validated by GPC.

GPC Biotech, of Munich, Germany, will fund the cost of developing the peptide-based assays and will pay Karo Bio royalties on compounds that enter development or that are out-licensed. GPC retains worldwide commercialization rights, while Karo Bio can obtain access to targets that GPC discards. Financial terms were not disclosed.

The initial collaboration was based on a 50-50 cost-revenue model. It served as a proof of concept and assured GPC that the partnership would work, said Hannes Loferer, senior director of microbiology at GPC Biotech. The assays developed during that project now are being formatted for high-throughput screening, said Petra Bassen, head of investor relations and corporate communications at GPC.

GPC has based its antibacterial strategy around the observation that the functions of up to 40 percent of the genes identified in bacterial genomes still are unknown. "We have decided we want to examine this category of genes in the identification of novel targets," Loferer said.

The company has used a bioinformatics approach to draw up a candidate list of genes that encode potential targets. It used both negative screening and conditional mutations triggered by the presence of an inducer to identify those essential for bacterial survival. It has characterized some of these targets through its ProteoCode proteomics platform and identified the biochemical pathways on which they act. Others, however, remain unknown, said Loferer. "That's the whole purpose of this collaboration."

Karo Bio's BioKey technology is based on the use of peptides that bind biologically active sites on protein molecules. These can be used to assess the "biological relevance" of each site and to mark those with development potential for screening against small compound libraries. GPC will obtain leads from its recent acquisition of Mitotix Inc., of Cambridge, Mass., which, said Loferer, supplies expertise in medicinal chemistry, high-throughput screening, and lead optimization.

GPC also has an antifungal program that has reached preclinical development, Loferer said.