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Lion Wins $100M Deal With Bayer, Will Build US Bioinformatics Facility

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HEIDELBERG, Germany--In a unique bioinformatics outsourcing arrangement that participants have dubbed an "expert-assisted spin-in," privately-held Lion Bioscience has won a five-year, $100 million deal with Bayer through which the two German companies will establish a bioinformatics research center in Cambridge, Mass. Bayer will make an equity investment in Lion of 11 percent of common stocks and will contribute upfront payments for unlimited, nonexclusive use of Lion's informatics software tools, Bioscout and SRS, as well as for exclusive rights for one year to systems developed through the partnership.

Bayer will also finance the new research center, which will be 100 percent owned by Lion for five years. After that period, Bayer may opt to spin the unit in to its own company. Bayer executives said the center will represent an integral part of its physiomics activities and predicted the alliance will position the company to quadruple its research output in the next five years.

The bioinformatics center, to be called Lion Bioscience Research, will develop information technology systems for life science data analysis and use them to deliver to Bayer targets, gene expression markers, and single-nucleotide polymorphisms, the companies said. The deal calls for Lion to analyze Bayer's own databases and public data to deliver 500 in silico targets and genetic markers, for which Bayer will retain intellectual property rights and Lion will receive royalties. Lion will also provide training to Bayer staff and install an intranet-based communication system to deploy its technology at Bayer's facilities worldwide. Lion intends to grow the center to a staff of 20 within two years and said the Boston-area location was selected for its pool of highly qualified scientists.

Explaining the motivation behind such a partnership, Wolfgang Hartwig, Bayer's head of pharmaceutical research, said, "One has to understand there's a gene rush out there and there's a very narrow time window of investment." Through an existing functional genomics deal with Millennium Pharmaceuticals, Bayer will be receiving 225 qualified drug targets from diseased tissue. The Lion collaboration, Hartwig said, "represents the last piece of the puzzle in the key enabling technologies."

While the collaboration is focused on drug discovery, Hartwig added that the technologies developed by Lion might be extended to Bayer's activities in diagnostics and agrochemicals.

I-biology

Lion has coined the term i-biology--i standing for information, integration, interdisciplinary, intelligence, interaction, and individualization--to describe the technology platforms, comprising hardware and software, that it will design at the new center. Lion's CEO, Friedrich von Bohlen, explained his company's strategy as one focused less on software development than on integrating systems and diverse data from pharmaceutical research areas that generate biological compounds, and medical, chemical, and toxicological data. "We've seen companies with about 70 software modules in preclinical biological and chemical areas," he said. "That means 70 kingdoms, and that makes the whole communication and integration process very difficult." Lion's mission, von Bohlen said, is to "reengineer the information technology concept of life sciences and build it as a whole block."

One component of the i-biology system will be an ultrahigh-throughput alert system that will conduct daily screens of public and proprietary data. Lion said the system will rely on high performance-computing capabilities it has acquired through recent deals with Paracel and Genias. Strategic alliances with the European Molecular Biology Laboratory, the European Bioinformatics Institute, and the German Cancer Research Institute have also secured Lion access to new algorithms and novel methods for datamining and integration.

While the deal with Bayer bars Lion establishing a similar research alliance in the Boston area, Lion said it expects to enter similar "expert-assisted spin-in" arrangements with other life sciences companies "in the near future." The company asserted that the concept could be applied as well to disciplines besides drug discovery, such as agricultural biotechnology, crop protection, and fine chemicals. Added von Bohlen, "We don't know of any other concept being announced, talked about, or approached anywhere in the world with a similar approach for integrating data as our i-biology concept."

--Adrienne Burke

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