Biotech Values

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This appeared in a local Newspaper--The Times of Trenton--regarding Lexmark (LEXG). The full text can be found at:

http://www.nj.com/business/times/index.ssf?/base/business-1/1105779915131132.xml

Anyone have an option on the company? It just announced that "it has advanced two of its drug discovery programs into preclinical development in preparation for investigational new drug (IND) applications. The first, LX-1521, is a small molecule compound to be developed as a potential cancer treatment. The second, LX-5431, is a protein to be developed as a potential biotherapeutic for thrombocytopenia, a condition that results in bleeding disorders. The functions of the targets of both potential therapies were discovered in Lexicon's Genome5000(TM) gene knockout program. This program has produced more than 60 drug discovery programs to date."

Here's the first part of the newspaper story:

Gene testing gets boost from mass mouse production

Sunday, January 16, 2005

By ANDREW D. SMITH

HOPEWELL TOWNSHIP - Of all the ways to determine a particular gene's function, the most intuitive is to engineer and observe an animal, usually a mouse, that lacks the gene in question.

Researchers have been knocking out mouse genes for years now, but the time and cost of working mouse by mouse has stopped most organizations from investigating more than a handful of genes a year.

No one could make "knockout mice" fast enough or cheap enough to get any broad understanding of the roughly 25,000 genes that mice and humans share - no one, that is, until a firm called Lexicon Genetics invented mass mouse production.

The Texas-based company, which employs about 100 people in Hopewell Township, is using this system to investigate the 5,000 genes that appear most important to human health.

Lexicon researchers, who have already studied 2,000 genes, look to be three years from finishing up, but the effort has already paid off for their employer.

Lexicon has parlayed its respected technology and its work to date into lucrative partnerships with some of the world's largest drugmakers.

In addition to multimillion-dollar deals with Genentech and Takeda Pharmaceutical Co., Lexicon has signed several deals with Bristol-Myers Squibb, the most recent of which will generate a minimum of $66 million.

In addition to these partnerships, Lexicon has sublicensed its knockout mouse technology to 13 of the largest drugmakers in the world. Johnson & Johnson is the latest company to join the list.

Why are drugmakers so eager to do business with Lexicon?

"If you look at the top-selling 100 drugs in the world, they act on a total of 43 genes. If you expand to the next 100 drugs, the number of gene targets increases by four. In other words, the entire drug industry makes a living off 47 genes," said Julia Gregory, Lexicon's chief financial officer.

"Now, keeping that in mind, consider our Genome 5,000 project. We expect that something between 3 percent and 5 percent of all the genes we examine will turn out to be promising targets for drug therapy. If you take the low number, 3 percent, and multiply that by 5,000, you come up with 150 genes, triple the number that the entire pharmaceutical industry uses now . . . This is a very important project."

As Lexicon searches through its list of 5,000, the company is looking for genes that make people susceptible to everything from obesity to depression to cancer.

To find these genes, Lexicon engineers mice, submits them to endless tests and looks for abnormally healthy specimens.

Every time Lexicon identifies a supermouse, a mouse made super by the elimination of some counterproductive gene, the company discovers another potential drug target.

After finding a target gene, Lexicon figures out which proteins it leads the body to produce. Then, the company must find chemicals that bind to those proteins and nullify them.

In theory, this sounds easy. In practice, it takes a lot of time and effort.

Drug companies maintain huge "libraries" of chemical compounds, which they bombard at targets one by one. If all goes well, one of the chemicals bonds with the target.

After finding a stock chemical that bonds, the drug companies tweak the chemical's structure to optimize the effect.