EPIX PHARMACEUTICALS and GLAXOSMITHKLINE

EPIX Pharmaceuticals, Inc., believes that it can design more effective drugs through three-dimensional computer modeling, and GlaxoSmithKline Plc agrees. In December the two firms announced a collaboration on a class of targeted therapies engineered by EPIX’s algorithms. GSK will pay EPIX $35 million up front in cash, half of which will be used to bring GSK’s ownership interest in EPIX to about 10 percent. The big payoff for EPIX will come, of course, if its treatments work. If the drugs hit all clinical and sales targets, GSK will pay up to $1.2 billion in milestone payments, as well as double-digit royalties.

The focus of the collaboration is small-molecule drugs that act on G-protein coupled receptors that lie on the membranes of cells, acting as a cell’s doorway. GPCR therapies are nothing newin fact, about 40 percent of today’s top-selling drugs act on GPCRs. But today’s drugs (as well as many failed drug candidates) tend to act not only on the intended receptor but on others as well, causing damaging side effects. With its computer programs, EPIX says it can more accurately determine the shape and size of a receptor, letting it design a drug that will bind only to it and eliminate the involvement of untargeted receptors.