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Biotech / Medical : Pharmacopeia, Inc. (ACCL) (Prev: PCOP) -- Ignore unavailable to you. Want to Upgrade?

To: Susan Rodney who wrote (33)	11/10/1997 1:26:00 AM
From: James Silverman	Read Replies (1) \| Respond to of 179

Sue, Just wanted to reply piecemeal to your post contrasting the virtues of PCOP and ARQL, as I felt a little expansion upon the ARQL methodology was in order. >Arqule is quite adept at robotic synthesis, simply the >synthesis of chemical compounds using robots. Much more than that.ÿ ARQL has system which allows for integration of SBDD and CC, as well as bioinformatics.ÿ Its also much more ammendable to optimization without synthesizing 1 million compounds. I would be curious as to how PCOP compares in its integration of these various platforms which I believe underlies the true strength of ARQL. ÿ >Robotic synthesis is certainly more efficient than traditional >synthesis methods, but less efficient than pool and split >synthesis, and is not proprietary or unique. Chemistry in general is not proprietary per se.ÿIt takes the talents and imagination of the chemists to make things work.ÿFor example, Merck doesn't have patents on chemistry, they have great chemists. ARQL has proven again and again through their new and expanding partnerships that they have a powerful method of producing drug like compounds.ÿ If it was easy as buying a few machines, the big pharmas wouldnt even need these guys yet they're practically banging down their doors. >Pharmacopeia's ECLiPS technology, however, is patented >and allows for the rapid synthesis of large numbers of >compounds. For comparison sake, Pharmacopeia is currently >making approximately 1 million compounds per year. By >contrast, a typical robotic synthesis company makes >between 150,000 and 200,000 compounds per year. And in >drug discovery, numbers are the name of the game! I politely disagree, as I think this ignores the importance of diversity and optimization. PCOP is a good company but just because they can make 5X the compounds doesnt necessarily mean that they will produce more drugs. It depends more on how many types of scaffolds can be produced and how much functionality can be varied on each scaffold.ÿ Solution phase is ammendable to more types of reactions (although lots of progress in solid phase).ÿ Plus, if you can synthesize 3 libraries based upon a certain scaffold, each one an optimization of the previous, then synthesizing 1 million compounds is not necessary.ÿ In other words you can "distill" out the right compound without synthesizing a zillion compounds. In short, drug discovery is far more than a simple game of sheer numbers. Jim

To: Susan Rodney who wrote (33)	11/11/1997 1:50:00 AM
From: John Dwyer	Read Replies (2) \| Respond to of 179

Hi Sue, Thanks for your reply. I think that the combichem field is certainly big enough for two (or more??) companies. ArQule certainly seems to have the momentum right now, inking deals like crazy. I also agree with Jim's comment that some sort of functional screening will be important, although I thought I had heard that PCOP has some good biological screens in-house as well, care to elaborate? My feeling is that the ultimate success for these companies (in the absence of in-house development programs) will lie in the success of their collaborative agreements. I have found it quite difficult to get actual details on these agreements but my feeling is that ARQL gets lower royalty rates, in general, than PCOP. I also believe that this is why they get so many deals. Big pharma can give ARQL leads plus $50-100 million in milestones plus, say, 5% royalty (this is a guess). Compared to what that would cost big pharma in house, it's a good deal... they can focus on other targets in house. If PCOP requires a higher royalty, say 15-20%, then big pharma might be less apt to ink a deal. I have no idea if this is accurate but it gives an alternative to the "ARQL is better" argument. It's not that simple of course. PCOP also has in-house programs under development which adds to the equation. I'm not sure if ARQL has anything under development... they certainly may have in-licenced something by now. All in all, I think that PCOP is somewhat undervalued and ARQL is somewhat overvalued. I also feel that as the success of these programs becomes clearer, having a little of both in your portfolio will have proven to be a prudent investment. Thank you, Sue, and PCOP for participating in the thread John