Lexicon, Genentech expand alliance to develop new drugs using Lexicon's gene knockout technology

By E. Janene Geiss

Philadelphia, Dec. 1 - Lexicon Genetics Inc. announced Thursday the expansion of its drug discovery alliance with Genentech, Inc. to include the advanced research, development and commercialization of new biologic drugs.

Under the expanded alliance, Lexicon said it will conduct advanced research on a broad subset of targets included in Genentech's Secreted Protein Discovery Initiative program and validated using Lexicon's proprietary gene knockout technology, according to a company news release.

Lexicon said it may develop and commercialize drugs modulating up to six of these targets.

Genentech retains an option on the potential development and commercialization of these drugs under a cost and profit-sharing arrangement with Lexicon having certain conditional rights to co-promote drugs on a worldwide basis, officials said.

Lexicon said it will receive a total of $25 million in upfront and milestone payments and research funding during the three-year advanced research portion of the expanded alliance.

Lexicon also will receive payments from Genentech upon achievement of milestones related to the development and regulatory approval of certain drugs resulting from the alliance that are developed and commercialized by Genentech, officials said.

Lexicon said it is entitled to receive royalties on net sales of these products, provided they are not included in a cost and profit-sharing arrangement.

Genentech is entitled to receive milestone payments in the event of regulatory approval and royalties on net sales of products commercialized by Lexicon outside of a cost and profit-sharing arrangement, officials said.

The expanded alliance is designed to combine Lexicon's novel target validation capabilities with Genentech's expertise in research, clinical development, biologics manufacturing and commercialization to advance the development of targets within Genentech's protein discovery program, officials said.

"The expansion of our alliance with Genentech reflects the success of our initial collaboration and is a validation of our gene knockout approach to defining gene function for drug discovery," Arthur T. Sands, president and chief executive officer of Lexicon, said in the release.

Lexicon, based in The Woodlands, Texas, is a biopharmaceutical company focused on the discovery and development of breakthrough treatments for human disease.

Genentech is a South San Francisco biotechnology company focused on development and commercialization of biotherapeutics.

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