Compugen partnering with U.S.-based Millennium Pharmaceuticals

Israel-based Compugen has research partnerships with companies in Europe, Japan and the United States.Compugen and Millennium Pharmaceuticals announced at the Israel Bio-Tech 2002 Conference in March a cooperative agreement to develop software tools to assist the prediction of protein pathways …

Israel-based Compugen has research partnerships with companies in Europe, Japan and the United States.Compugen and Millennium Pharmaceuticals announced at the Israel Bio-Tech 2002 Conference in March a cooperative agreement to develop software tools to assist the prediction of protein pathways for use in drug discovery and development. The two companies will share development costs and rights to the technology developed through the collaboration.

Millennium Pharmaceuticals, headquartered in Cambridge, Mass., develops technologies that can be used to discover and develop new drugs and has a market value of $7 billion.

Tel Aviv-based Compugen’s specialty is bio-informatics – the analysis of genome data, which combines the disciplines of mathematics and computer science with molecular biology.

“Our partnership with Millennium Pharmaceuticals is intended to create a new platform that will allow better observation of biochemical processes of the pathways between genes and proteins,” said Lior Ma’ayan, Compugen’s vice president of commercial operations.

Research has found that proteins have important biological influences, known as transcriptions, processes by which key genetic information is transferred from DNA molecules. Understanding transcriptions will help scientists identify and correct the side effects and toxicity caused by chemotherapy in the treatment of cancer, Ma’ayan said.

Compugen believes the research has immense potential, because the so-called transcriptome field is new. He said Millennium Pharmaceuticals chose to partner with Compugen to develop the technology after investigating deals with several other companies.

“We are a public company and must publish large financial investments in the company,” Ma’ayan said. “The results (of the research) may only arrive in the long term. If the deal succeeds, we will share the rights to the technology, but we will agree on ownership of the technology’s biological products. In other words, Millennium Pharmaceuticals brings know-how and raw knowledge to the partnership. Together, we will develop a technology platform based on that knowledge. Rights to that platform will be shared, and we will both be able to use it. Millennium Pharmaceuticals will have exclusive rights to the biological products they develop from the platform.”

This means that, in the long term, Compugen will not benefit from the pharmaceuticals Millennium Pharmaceuticals develops, but will be able to license the use of the technology developed through the partnership to other companies.

Joint ventures between companies are common in the biotechnology industry, Ma’ayan said. “Cooperation is essential, due to the long development times and high risks for drugs. The sector is so new there are not yet any winning business models, so companies prefer conceding their competitive assets in favor of (cooperation).”

A major example of this spirit is in Alzheimer’s research. While scientists discovered solutions to Alzheimer’s in mice in the 1990s, no similar solution has yet been yet found for humans.

Compugen wants to be a key biotechnology player, contracting joint ventures to enter as many fields and research programs as possible, thereby spreading the risks and increasing its chances of participating in future successes. The company already has agreements with Switzerland-based Novartis AG, Pfizer, and Kyowa Hakko Kogyo of Japan, as well as with promising startups such as Avalon Pharmaceuticals and diaDexus, both of the United States. Compugen invested both cash and options in these startups.

“As a company coming from the computation biology field, we want to create a broad network of business opportunities in which something must succeed,” Ma’ayan said.