Merck Serono of Darmstadt, Germany, and Compugen, a therapeutic product discovery company of Tel Aviv, Israel, have established a novel start-up company called Neviah Genomics, focused on the discovery and development of novel biomarkers for the prediction of drug-induced toxicity.

Neviah Genomics will be operating out of the Merck Serono Israel Bioincubator. Merck Serono Ventures will provide the initial funding for Neviah Genomics, while Compugen will utilize certain proprietary predictive discovery technologies, receive an equity ownership in the new company and a right to royalties from potential future sales. Further financial details of the agreement were not disclosed.

Neviah Genomics represents the first investment within the framework of the recently formed Merck Serono Israel Bioincubator program. As such, Neviah Genomics will operate out of the state-of-the-art facilities inaugurated last month at Merck Serono's Israeli R&D center Inter-Lab, which offers 600 square meters of infrastructure and a wide range of incubation services for the program's new start-ups.

This agreement follows a successful collaboration between Merck Serono and Compugen for the discovery of "biomarker signatures" for drug induced toxicity during 2009. Merck Serono and Compugen believe that establishment of Neviah Genomics with the combined capabilities of the two companies could satisfy the growing market need for products to predict toxicity profiles of lead drug candidates at an early stage of development, thereby minimizing attrition and mitigating risk of late-stage drug failure.

“The formation of Neviah Genomics on a 'discovery on demand' basis enables Compugen to both continue its focus on therapeutic monoclonal antibodies and therapeutic proteins in the fields of immunology and oncology, and provide potential future benefits for our shareholders from our equity interest in Neviah and royalties from future product sales,” said Anat Cohen-Dayag, Ph.D., president and CEO of Compugen.

Susan Herbert, executive vice president of global business development and strategy, Merck Serono, said, "Neviah Genomics is a perfect illustration of our goals behind the establishment of the Israel Biotech Incubator: to leverage Israeli science and know-how and get access to novel products and technologies for the benefit of Merck Serono's core therapeutic areas. In this regard, we are delighted to be collaborating on our first investment with Compugen….We believe that our joint technology and resources represent a unique basis for a start-up to enter this emerging field that has the potential to significantly reduce the risk of drug discovery and development."

Neviah Genomics will benefit from Compugen's sophisticated proprietary computational discovery platforms to develop advanced toxicogenomics diagnostic tests. Developed tests will be used for the prediction of drug-induced toxicity and integrated into a biomarker platform to support the prioritization and development of drug product candidates.