It ain't easy being a development-stage drugmaker. While all such drugmakers enter the public markets full of hope and with exciting sounding compounds, trying to get these compounds through FDA and EMEA regulatory rigmaroles can be trying, to say the least.

Equally as difficult is separating out the multibagger-potential, early-stage drugmakers that go on to become the next Amgen or Genentech (NYSE: DNA) from the multitude of pharmas and biopharmas that go down in flames. Recently, Fool analyst Brian Lawler had a chance to interview the CEO of one such development-stage drugmaker, Pharmacopeia's (Nasdaq: PCOP) CEO Dr. Leslie Browne.

Pharmacopeia discovers and develops small-molecule drug candidates to treat a wide range of indications, from cardiovascular to inflammatory diseases. Read on for Browne's take on what makes Pharmacopeia different and how he hopes his company will develop in the future.

Brian Lawler: What makes Pharmacopeia unique among its small-molecule development-stage pharma peers?

Leslie Browne: First and foremost, we feel that the depth and breadth of our internal and partnered product pipelines set us apart from most of our peers. We have a broad portfolio of drug candidates under our internal development or entirely financed by partners that include seven therapeutic candidates in phase 2 or phase 1 development and several additional compounds in preclinical development or lead optimization. These clinical-stage programs alone are addressing multiple indications, including hypertension, diabetic nephropathy, muscle wasting, inflammation, and respiratory disease.

While we're very proud of our ongoing programs, the success that we've had in building and advancing product pipelines for both ourselves and our collaborators is what truly differentiates Pharmacopeia. We possess a unique asset -- the industry's largest chemical compound collection, which numbers nearly 8 million structurally diverse compounds, as well as a unique drug discovery platform that enables us to rapidly and cost-effectively identify leads for our therapeutic programs.

We've leveraged this platform to generate the often first- or best-in-class therapeutic candidates that are currently being advanced by our collaborators or ourselves. Furthermore, this unique discovery asset, which allows Pharmacopeia to operate as a self-sustaining company, can be leveraged in other important ways.

Take, for example, the creative licensing deal that we recently struck with Bristol-Myers Squibb (NYSE: BMY). In exchange for the rights to a very promising phase 1 clinical program, Pharmacopeia agreed to dedicate a portion of its existing internal medicinal chemistry resources to pursue an unrelated Bristol-Myers program for up to three years. These resources are in lieu of an upfront cash payment with no milestone payment until the filing of an NDA, which allows us to retain our capital resources for the advancement of our own internal development programs.

Lawler: Can you briefly describe some of Pharmacopeia's lead drug candidates?

Browne: Our lead internal drug candidate is PS433540, which we also refer to as DARA, an acronym for dual-acting receptor antagonist. PS433540 is a dual-acting angiotensin and endothelin receptor antagonist that's being developed as a potential treatment for hypertension and diabetic nephropathy, two very large disease areas. Alone, the worldwide hypertension market is estimated at nearly $25 billion and expected to surpass $30 billion by 2010.

PS433540, the first and only DARA compound in development, possesses two clinically validated mechanisms of action in a single compound. There are considerable preclinical and expanding clinical data to support that the combination of these activities may provide improved treatment options for several cardiovascular diseases. We think this combined activity could be especially useful in lowering blood pressure and proteinuria in patients with diabetic kidney disease.

Our phase 1 clinical program for DARA has yielded positive results, including an unexpectedly robust lowering of blood pressure in normotensive subjects. We initiated our phase 2 program for PS433540 in September 2007, roughly six months ahead of schedule, and expect enrollment in our phase 2a proof of concept study to be completed in the near term. The purpose of this study is to establish initial tolerability and 24-hour efficacy of PS433540 in hypertensive subjects.   

Pharmacopeia also recently in-licensed a phase 1 muscle-selective androgen receptor modulator (SARM) program from Bristol-Myers. SARMs are a potential novel treatment for muscle wasting associated with a number of serious conditions, including recovery from surgery and severe burns, dialysis in end-stage renal disease, and cancer- and AIDS-related cachexia, as well as aged-related ailments such as osteoporosis and frailty. The current lack of safe and effective therapeutics for muscle wasting represents an important medical need that SARMs may be able to address. While Pharmacopeia is initially focused on non-aging-related applications, estimated to be more than a $3 billion market, age-related conditions grow the total potential addressable market for SARMs to more than $10 billion. Furthermore, Merck recently licensed a similar therapeutic candidate, providing additional critical validation for PS178990, our lead compound in the program.

PS178990 is believed to be one of the most potent SARM agonists currently identified. The compound has been shown to be safe and well tolerated at and above anticipated therapeutic doses in a phase 1 single ascending dose study. In 2008, we expect to complete the phase 1 studies necessary for advancing PS178990 into phase 2 development.

We also have a broad pipeline of clinical and preclinical partnered programs with leading drug development companies, including Bristol-Myers, Cephalon (Nasdaq: CEPH), GlaxoSmithKline (NYSE: GSK), Schering-Plough (NYSE: SGP), and Wyeth (NYSE: WYE). This includes two programs currently in phase 2 development: CXCR2 for chronic obstructive pulmonary diseases (COPD), which is partnered with Schering-Plough; and p38 kinase inhibitor for rheumatoid arthritis and psoriasis, which is partnered with Bristol-Myers.

Lawler: What are the most significant upcoming development milestones for Pharmacopeia?

Browne: For our lead internal program, PS433540 (DARA), we plan to complete enrollment in our ongoing phase 2a study in the near term and announce results in the second quarter of 2008. We also plan to announce results from an endothelin challenge study by the end of 2008 and initiate a phase 2b hypertension study in the first half of 2008.

For our recently acquired PS178990 (SARM) program, we expect to complete our technology transfer from Bristol-Myers during the first quarter of 2008 and complete a phase 1 multiple ascending dose study by year-end.

Finally, we expect to continue to see progress achieved through our multiple ongoing collaborative programs. We hope that data will be reported on the partnered programs that are currently in phase 2 with Schering-Plough and Bristol-Myers. We believe that additional partnered programs may enter phase 1 and phase 2 clinical trials during 2008.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Glaxo is a selection of the Income Investor newsletter. The Fool has an A-plus disclosure policy.