Nothing in biotech goes together better than a screening system and a library of compounds. Individually, they're useless, but combined, they have the power to discover a blockbuster drug.
The latest such collaboration pairs Amylin Pharmaceuticals'
The BioMAP assay is a human cell-based screening system. The cells are exposed to compounds, and by measuring changes in different protein levels within the cells, the assay can determine which biological pathways the compounds are affecting.
BioSeek is trying to get as much income from its screening assay as possible. In the last year, it has announced collaborations to screen compound libraries owned by Boston Scientific
Amylin is also leveraging its library to the fullest. Earlier this year, Amylin and PsychoGenics founded a new company, Psylin Neurosciences, to screen its library for compounds to treat neuropsychiatric disorders. The library contains an extensive panel of peptides taken from nature and human peptides not previously described, so it should contain compounds that affect a wide array of conditions.
The collaboration announced earlier this week builds on an agreement the two companies made last summer. The new agreement allows BioSeek to use the screen's results to develop the two most promising compounds in areas outside Amylin's research focus. In exchange for the exclusive license, Amylin will receive milestone payments and royalties if BioSeek develops the compounds into therapeutic drugs. The agreement also allows Amylin access to the results of the screen; royalty payments could go in the other direction if Amylin decides to use the data to develop compounds on its own. It's win-win for both parties.
The collaboration seems like a pretty good deal for Amylin. The screen should result in a lot of useful information about the compounds in its library. Better yet, if BioSeek is able to develop one of its compounds into a drug, royalty payments could turn the $10 million investment into a future 10-bagger.
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While writing this article, Fool contributor Brian Orelli, Ph.D., flashed back to the entire summer he spent shoving compounds into vials for a high-throughput screen. He doesn't own shares of any companies mentioned in this article. GlaxoSmithKline is a Motley Fool Income Investor pick. The Fool has an ironclad disclosure policy.