Pharmacopeia Inc announced a new drug discovery collaboration with Schering-Plough Corporation, continuing Pharmacopeia's research relationship with Schering-Plough for a minimum of three additional years.

Pharmacopeia and Schering-Plough began their relationship in 1994, initially focusing their small molecule drug discovery activities on asthma and cancer, and later extending into other therapeutic areas. The companies expanded their relationship in 1998 through a five-year collaboration agreement under which Pharmacopeia created novel combinatorial libraries for use by Schering-Plough scientists and assisted in the optimization of new drug discovery compounds for Schering-Plough research programs.

Under the terms of the new agreement, Pharmacopeia and Schering-Plough will work collaboratively, applying their medicinal chemistry expertise to selected compounds in order to identify candidates for clinical development by Schering-Plough. Pharmacopeia also will use its internal compound library to identify and optimize new drug candidates against multiple therapeutic targets from Schering-Plough's research and development programs. If successful, Pharmacopeia will license these optimized drug candidates to Schering-Plough for further development. Certain optimization programs initiated under a 1998 agreement will continue as part of the new collaboration between the companies.

Schering-Plough will provide Pharmacopeia with research funding, and, in return for its successful drug discovery activities, Pharmacopeia will be entitled to receive milestone and other payments from Schering-Plough as compounds progress through development. Pharmacopeia also will be entitled to receive royalties on sales of products resulting from the collaboration.