By Debbie Strickland

Aurora Biosciences Corp. has landed a third big pharma partner to help underwrite development of the La Jolla, Calif., company's "ultra" high-throughput screening system (UHTSS) while pursuing drug discovery via Aurora's current screening technology.

Warner-Lambert Co., of Morris Plains, N.J., agreed to pay Aurora up to $65 million plus potential royalties, with additional options that could "dramatically increase" the value of the deal, according to Paul Grayson, Aurora's vice president for corporate development.

Under terms of the agreement, Warner-Lambert will provide:

* $25 million during the first three years for collaborative research, license fees, screening services and the UHTSS;

* milestone payments totaling potentially more than $40 million for compounds successfully developed using Aurora technology;

* other possible payments through the exercise of options for access to additional screens;

* and royalities on products that result from the collaboration.

The other two members of the UHTSS development syndicate — Bristol-Myers Squibb Co., of New York, and Eli Lilly & Co., of Indianapolis — have agreements "substantially similar" to the Warner-Lambert deal. Each partner will have co-exclusive access to UHTSS as components become available.

"Our business model is to clone out our technology platform as a mechanism to grow that entire platform," said Grayson. "You learn a lot from having a lot of very talented people using the technology. That's the way the technology grows."

Within 12 months, Aurora will begin installation of UHTSS at Warner-Lambert's Parke-Davis pharmaceutical research facility in Ann Arbor, Mich.

The syndicate partners also have access to Aurora's current-generation high-throughput screening services and fluorescent assay technologies.

"We can find hits today for our partners," said Grayson. "We wanted to make sure we could collaborate with them today while we grow the overall technology."

First Stage Of New Screening Method Complete

UHTSS is being developed and completed in stages. The first component, now complete "for the most part," Grayson said, is the automated storage and retrieval system, capable of handling more than a million compounds.

The next stage is the NanoPlate, in which miniature assays are performed, slated for completion within the next 12 months. Within 12 months after that, the last piece of the puzzle — the overall process control and bioinformatics — should be ready, Grayson said.

Once fully developed, UHTSS will perform miniaturized screens on more than 100,000 discrete samples a day. That's 10 times the rate of Aurora's own current high-throughput screening speed.

Another pillar in the company's platform is a portfolio of fluorescent assay technologies, which collaborators are already using for drug discovery. The company's fluorescence-based screens use mammalian cells engineered with disease pathways to judge the biological effectiveness of drug candidates on enzymes, proteins, ligands and receptors associated with specific disorders.

The fluorescence screens enable researchers to note immediately whether a compound has activated or inhibited targeted molecular events.

Deal Continues Partnering Successes

"The technologies and assays that we will acquire in this collaboration with Aurora will further increase the speed and efficiency with which new compounds are discovered and developed," said Wendell Wierrenga, senior vice president for preclinical research, development and technologies for the Parke-Davis Research Division of Warner-Lambert.

The deal marks the latest in a string of good financial news stretching to December 1996, when Aurora landed its first UHTSS syndicate member, Bristol-Myers Squibb, which agreed to pay up to $100 million, including milestones and options. A month later, Lilly joined the club, agreeing to provide more than $20 million during the first three years, plus milestones and potential option payments.

Aurora's collaborations outside the syndicate include agreements with Roche Bioscience, a Palo Alto, Calif.-based subsidiary of F. Hoffmann-La Roche A.G., of Basel, Switzerland; Sequana Therapeutics Inc., of La Jolla; Allelix Biopharmaceuticals Inc., of Mississauga, Ontario; ArQule Inc., of Medford, Mass.; and Alanex Corp, of San Diego.

In June, the company completed its initial public offering, garnering net proceeds of about $40 million. As of June 30, Aurora had $47.8 million in cash and marketable securities. Net losses for the first half of 1997 totaled $2.4 million.

The company's shares (NASDAQ:ABSC) closed Tuesday at $14.625, up $1.125. *