Two-year-old start-up firm, Arqule Inc., signed a potential $35million drug discovery agreement with Abbott Laboratories, givingthe privately held Massachusetts-based combinatorial chemistrycompany its second major corporate deal.

Seth Harrison, Arqule's president and CEO, said specific financialterms were not disclosed, but the partnership does not include anequity investment by Abbott Laboratories, of Abbott Park, Ill.

Depending on achievement of milestones and Abbott's exercise ofrenewal options, Harrison said the collaboration could cover fiveyears and pay Arqule, of Medford, up to $35 million.

The agreement will focus on Arqule's use of its combinatorialchemistry techniques to develop custom libraries of compoundsbased on a drug candidate molecule provided by Abbott. Arqule'stechnology, Harrison said, is designed to accelerate the process ofrefining a potential lead into a drug for clinical development.

"We're helping Abbott to remove chemistry bottlenecks," he added,in an effort to shorten drug discovery time.

Arqule will take a template molecule, Harrison said, and create amini-library of variant compounds in an attempt to find the mostpromising candidates. The deal also allows Abbott to screen Arqule'slibraries of compounds for potential drug leads.

Harrison said the agreement with Abbott does not prevent Arqulefrom entering similar drug discovery partnerships with otherpharmaceutical firms.

In March, Arqule, which was founded in 1993, signed a potential $30million collaboration with Sweden-based Pharmacia Biotech for thesynthesis of biomolecules for bioprocessing and research. _ CharlesCraig

(c) 1997 American Health Consultants. All rights reserved.