Rigel Inc., in the major first collaboration in its two-year history, signed a deal worth at least $20 million with Janssen Pharmaceutica NV to use its advanced functional genomics technology to help Janssen identify new drug targets that control the progression of colon and breast cancer.

Under the deal's terms, Janssen, of Beerse, Belgium, will provide up-front payments and research funding for a minimum of three years. The deal also includes potential developmental milestones and royalties on sales of pharmaceutical and diagnostic products resulting from the collaboration. In return, Janssen gets exclusive worldwide rights to develop and market drugs against the targets that control cell-cycle regulation.

In addition, the Johnson & Johnson Development Corp. - like Janssen a subsidiary of New Brunswick, N.J.-based Johnson & Johnson - will participate in Rigel's Series D equity financing.

"We can't release the full terms, but the best thing I can say is that the research funding alone would approximate $15 million to $20 million over the five years of the deal," said James Gower, president and CEO of Sunnyvale, Calif.-based Rigel. "The total is well over that amount."

The collaboration with Janssen will focus on the discovery and validation of drug targets that regulate cell cycles, which involve a series of biological events that each cell does in order to divide. The companies intend to identify targets that can restore a mutated cell's ability to stop uncontrolled cell division either by triggering the cell death of a mutated cell, or by stopping the abnormal cell-cycle regulation process before a mutated cell can divide and spread.

"We take a different approach in linking genetics to target discovery," Gower said. "With Janssen, we will focus on incorporating our technology to look at what specifically regulates cell-cycle check points and tumor cells. Then we will discover the targets and small molecules that regulate the disformation of the cells and what causes them to revert back to their normal state."

Although the collaboration is focused on targets that can be regulated by small- molecule agents, the agreement also covers the predictive, diagnostic and protein therapeutic utility of discovered targets.

According to Gower, Rigel starts off where many drug-discovery companies stop - with a validated target. "We start with validated targets and we use them to screen and evaluate small-molecule leads and relevant genes. And we end up with gene sequencing as one of our byproducts."

Retroviral Probes Incorporated Into Cells

Discovered by one of Rigel's three co-founders, Garry Nolan, an assistant professor of molecular pharmacology at Stanford University in Palo Alto, Calif., Rigel's technology starts with proprietary retroviral probes that are put into human diseased cells. The probes become part of each cell's genetic material. A stimulus is applied to the cell to encourage it to do what it normally would do in the body. The point is to mimic the environment in the body as much as possible.

As the cells go about their normal business - but with the probe inside that acts like a monitoring device - Rigel's researchers can tell what each cell is doing. Using Rigel's specially designed functional biology screens that allow sorting of more than 60,000 cells per second - or 100 million cells in a few hours - data is collected on up to 10 parameters that describe how each cell responded to the stimulus.

By analyzing the resultant 1 billion data points, Rigel can rapidly identify the cells that had the desired phenotypic change. "We can see which breast cancer cell stopped dividing, for instance," he said.

By using the probes as "fish hooks" in proprietary genetic target identification screens, Rigel can then extract the resident target that the probe has affected and begin to characterize it by its functional relationship.

"Our retroviral-based approach allows the use of the cell's progeny or offspring [which carry the same phenotype-changing probe] to conduct more tests to confirm and further define the target," he said. The integration of these technologies yields not only functionally validated targets but also a functionally defined signaling pathway map of the cell's inner circuitry, structure-activity relationship information that can be used in subsequent drug design, and use as a competitive binding element in drug screening.

Founders Have History In Bay Area

Rigel was founded in 1996 by Nolan, Gower and Donald Payan. Gower, former senior vice president at Genentech Inc., of South San Francisco, also is a founder and former president and CEO of Tularik Inc., of South San Francisco, a biotechnology company developing small-molecule drugs that regulate gene expression. Payan is the founder and chief scientific officer of Khepri Pharmaceuticals, of South San Francisco, which merged with Arris Pharmaceutical Corp., of South San Francisco. Arris later merged with Sequana Therapeutics Inc., of La Jolla, Calif., to form AxyS Pharmaceutical Inc., of South San Francisco. (See BioWorld Today, Dec. 29, 1995, p. 1; and Dec. 10, 1997, p. 1.)

The company, which is "popping at the seams," will soon move into new office space in South San Francisco, Gower said. Rigel, which has 57 employees, also has three patents and more than 20 patent applications filed. Initial funding came from Alta Partners, of San Francisco, and Lombard Odier, of Geneva, Switzerland.

Although this is the fledgling company's first major collaboration, Gower promises more announcements soon. "We're getting the stuff working and we're starting to get responses from large pharma companies, which was our goal," he said. n