Merck Serono, Compugen form startup to catch drug toxicity early

Compugen has found a new use for its computational discovery technologies. The Tel Aviv, Israel-based company ($CGEN) and global drugmaker Merck Serono have joined forces to form a startup called Neviah Genomics, which will focus on developing diagnostic tests to spot drug-induced toxicities, which cause drugs to fail in clinical trials.

Neviah Genomics, which is getting initial funding from Merck Serono Ventures, will gain access to Compugen's computational platforms for discovering biomarkers that predict bad reactions to drug candidates. For its part, Compugen will get an equity stake and rights to royalties on future product sales from Neviah. The startup has evolved from the collaboration between Compugen and Geneva-based Merck Serono to hunt down biomarkers of drug-induced toxicity in 2009. The newly hatched operation will be housed in Serono's Israeli R&D center, and it's the first startup to get funded through the drugmaker's biotech incubator in Israel.

Computational methods have opened the door to new ways to identify drug-induced toxicities of compounds before they enter expensive clinical trials. "Fail early" has become an axiom of drug development, and Neviah Genomics aims to provide products that help companies nix drug candidates from contention early in development. Nailing down the toxicity profile of a drug candidate is key; 20% of drugs fail in trials because of adverse events in patients on the experimental therapies, according to the Tufts Center for the Study of Drug Development.

"We are delighted to be collaborating on our first investment with Compugen, one of the premier biotech companies in Israel and a world leading predictive drug discovery company," Susan Herbert, executive vice president of global business development and strategy at Merck Serono, said in a statement. "We believe that our joint technology and resources represent a unique basis for a startup to enter this emerging field that has the potential to significantly reduce the risk of drug discovery and development."

- here's the release

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