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ARIAD HAS 11 LICENSING AND/OR RESEARCH ACCORDS WITH SEVEN ACADEMIC

Executive Summary

ARIAD HAS 11 LICENSING AND/OR RESEARCH ACCORDS WITH SEVEN ACADEMIC and research institutions, the Cambridge, Mass. firm says in material derived from a "confidential private placement memorandum" dated Jan. 22. Ariad Pharmaceutical announced March 27 that it had raised $46 mil. from a private placement of stock, the largest ever start-up financing for a biotech firm. Ariad is focusing on the development of small molecule drugs that target the intracellular communication pathways controlling cellular function. "These potential second-generation biopharmaceuticals would be designed to control signal transduction from the surface of the cell through the cytoplasm and to control the fate of naturally occurring proteins within the cell," the company explained. Organized in April 1991 by former Centocor exec Harvey Berger, MD, Ariad has executed technology licenses and sponsored research agreements with MIT, the Whitehead Institute, Harvard, Stanford, Duke, the Research Foundation of the State University of New York and Yale. Initial drug discovery programs include inhibitors of the immune response (autoimmune diseases and organ transplant rejection); inhibitors of the inflammatory response (arthritis, inflammatory dermatoses, asthma and sepsis); inhibitors of the allergic cascade (celiac disease, rhinitis, dermatitis, and asthma); treatment of cancer and hyperproliferative disease (cervical cancer, leukemia and psoriasis); treatment of genetic disorders (cystic fibrosis); and hemostatic therapy (thrombocytopenia). While most of Ariad's programs involve intracellular targets, the hemostatic therapy program does not; the company says it is developing "an artificial semi-synthetic platelet to treat low platelet counts due to treatments such as chemotherapy and bone marrow transplantation." The project appears to be the most advanced among the six programs, having reached the preclinical testing stage in primate models. The route of administration being investigated is intravenous; in other programs, Ariad is focusing on alternative methods of delivery such as oral, topical, inhaled and targeted delivery. Ariad holds exclusive licenses to 15 patents pending in the U.S. Patent & Trademark Office and has options for licenses covering another three patent applications. The firm also has filed for two patents on its own behalf, in the area of "therapeutic strategies for altering the quality control of proteins in the cell." The two patents have "direct applicability to the company's program in cystic fibrosis," Ariad noted. The company has agreed to pay royalties on sales of patentable inventions, as well as "milestone payments in some instances and patent filing and prosecution costs." Ariad also said it may consider joint ventures or collaborations with a "major pharmaceutical company," particularly in the oncology area. Ariad already has organized an experienced management team. In addition to Berger, three other former Centocor execs have joined the firm -- Charles Cabot, senior VP-business operations, Robert Fatora, PhD, VP-corporate development, and Elaine Allen, PhD, VP- biomedical operations. Heading the scientific side of the business are Joan Brugge, a professor of microbiology at the University of Pennsylvania and Manfred Weigele, formerly VP-chemistry research at Hoffmann-La Roche. Ariad's 18-person founding board of scientific and medical advisors includes two Nobel laureates, David Baltimore, PhD, Rockefeller University, and George Palade, MD, University of California at San Diego School of Medicine. The private placement was managed by Wertheim Schroder, Hambrecht & Quist, Prudential Securities and D. Blech & Co. David Blech, who was instrumental in the $33 mil. private placement of Icos two years ago, sits on Ariad's board of directors, as does Mark German, managing director of D. Blech & Co. In its March 27 press release, Ariad said the offering was completely sold out, including over-subscriptions. Proceeds will go to "assemble a research and development organization capable of converting fundamental advances in molecular cell biology into pharmaceutical products," the release says. The company expects to have a staff of 75 by year-end.
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