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Now on Its Own, Pharmacopeia Drug Discovery to Ramp up Internal Efforts

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Approximately one month after its spin off from parent company Accelrys, Pharmacopeia Drug Discovery finds itself shaping a new business strategy that focuses on increasing R&D spending to support both collaborative and internal drug discovery.

In addition, company officials told Inside Bioassays last week that “at least 50 percent” of its assay platforms and services are cell-based as opposed to biochemical-based, and that percentage should continue to grow as PDD leverages proprietary techniques such as episomal transfection agents and assay miniaturization technology.

PDD, which completed its spin off from Accelrys (formerly Pharmacopeia) in early May, will now trade as an independent company on Nasdaq under the ticker symbol “PCOP.” The newly anointed Accelrys, meanwhile, has moved forward as a separate scientific software company. On May 20, it officially changed its name from Pharmacopeia, and is currently traded on Nasdaq under the symbol “ACCL.” (See BioInform, 5/10/2004, Inside Bioassays’ sister publication, for more details.)

Pharmacopeia has forged partnerships with several major pharmaceutical companies over the past few years, and has successfully guided four compounds to clinical trials with those partners. While the new PDD will continue this work of bringing lead compounds to the doorstep of pharma partners, it will also greatly increase efforts to cultivate drug candidates through an internal drug discovery program.

“It’s a two-pronged business strategy,” said Simon Tomlinson, PDD’s senior vice president for business development, “the first element being to continue with what has been very successful for us, which is collaborative drug discovery. The second is to ramp up what in the past has been a very modest effort for us, which is internal drug discovery.”

Tomlinson characterized PDD’s collaborative strategy as being from “target through to development,” where the company offers assay development and miniaturization; “almost any kind of screen with any kind of readout”; and screening against its own or a collaborator’s compound library.

“Then we take the hits or actives that we discover in screening, and then launch discovery, medicinal chemistry … and in vitro pharmacology campaigns to develop what we and others term ‘development candidates,’” Tomlinson said. At this stage, a drug is ready for ADME/Tox screening, animal testing, and clinical trials, and this “is increasingly our preferred hand-off point in drug discovery,” he added.

In terms of internal drug development, Tomlinson said that PDD has a “nice, healthy revenue position,” with a “modest burn of $46 million that we’re going to be able to invest more in doing internal discovery.” This initiative will be characterized by technologies and capabilities similar to those employed in the company’s collaborative drug discovery program, with the hopes of “advancing compounds to at least development candidate” stage.

“That development candidate we would potentially seek to … outlicense,” Tomlinson said. “Depending on what the economics of doing that look like, we may invest in taking the compounds forward, but almost certainly outsourcing the in vivo work required at that point.”

When asked what potential therapeutic areas PDD would consider for internal drug discovery, Tomlinson said that the company is “just in the process of looking at this. It’s an internal discussion that we’re really involved in right now.”

Cell-Based Tools

According to David Dunn, PDD’s assistant director of drug discovery, a majority of the company’s tools have been thoroughly validated for a cell-based approach. This is particularly important because “at least 50 percent of its assays are cell-based as opposed to biochemical,” he said.

“In terms of the growth of cell-based screening … it’s fair to say we’ve seen a doubling in the amount of cell-based screening as well as … utilization of assays for lead optimization over the past five years,” Dunn said.

“In terms of capabilities, we have a lot of capabilities that our collaborators have in this area,” he added. “We have the capability of doing all the cellular-type work that our customers ask us to do — the basic set of tools. In addition to that, we have some unique tools and capabilities,” he added.

Perhaps one of the most important of these tools, according to Dunn, is PDD’s episomal transfection technology for expressing particular receptors or other types of proteins in cells. This technique, which is relatively new, is now becoming more widespread, according to Dunn, but PDD “has been using it for the last five years and has a lot of internal expertise” in the area.

Dunn said that the composition of the cDNA episomal constructs allows them to replicate autonomously in the cell — meaning DNA integration of the genes is not necessary for expression. What that translates into is the ability to generate cell lines that express receptors in “two to three weeks, as opposed to months for standard transfection,” he said. In addition, he said that scientists “can generate these clones with high expression levels.”

Another specific strength for cell-based screens that Dunn cited is the instrumentation for assay miniaturization. Specifically, he said that Pharmacopeia was one of the first to use 1,536-well-plate screening (the company now uses Corning ultra-low-volume microplates), and that the company makes the BlueBird micro-drop liquid dispenser to enable such assays.

“The most challenging process in doing ultra-high-throughput screening in sub-microliter liquid volumes is liquid handling,” Dunn said. The BlueBird, he said, can deliver volumes down to 100 nL. Such small volumes are crucial in any screening campaign because of the desire to conserve reagents and drug candidates, but particularly in cell-based screens, in which live, transfected cells are an extremely valuable resource.

Lastly, Dunn alluded to a variety of read-out instruments — most of which are CCD-based and many of which Pharmacopeia helped develop early on in its existence.

It remains to be seen how successful PDD will be in internal drug discovery, but the company certainly has the appropriate tools in place: In addition to its assay platforms, Tomlinson said that the company has a “very large collection of proprietary drug-like small molecules — about seven-and-a-half million compounds, which we synthesized using our combinatorial approach to chemistry.”

But for now, the company will have to sustain itself on revenues generated from pharma collaborations that were established by Pharmacopeia.

So far, it has helped bring four compounds to clinical trials with three pharma partners: A drug targeting p38 kinase for rheumatoid arthritis with Bristol-Myers Squibb; a drug for an undisclosed indication with Daiichi; and two compounds with Schering-Plough for respiratory and inflammatory indications. Each of these has clinical milestone and possible royalty payoffs, but each is only in Phase I trials.

In addition, though, Tomlinson said that the company has major new collaborations in the works, but declined to disclose with whom and for what indications.

The company is also busying itself with finding a permanent CEO and president. Joseph Mollica, who was president, chairman, and CEO of Pharmacopeia prior to the spin-off and name change, is currently the acting CEO and president of PDD. According to Tomlinson, this situation works fine for now.

“I’m not close to the situation myself,” Tomlinson said. “But we don’t feel any particular pressure — it’s not like we have an empty chair. We’ve got [Joe], who knows our business inside-out, running the show. As he will continue on as chairman of the board, there will be a very smooth transition, we think, to the new CEO.”

—BB

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