Cryptome in deal with German biotech Xantos

Melbourne drug discovery biotech Cryptome Pharmaceuticals (ASX:CRP) has turned on its income tap after signing a collaboration agreement with Germany's Xantos Biomedicine to validate Xantos' lead anti-cancer molecule.

Cryptome will apply its proprietary Cryptomics technology to home in on the biochemically active epidopes of the Xantos molecule, a novel protein that mediates proliferation of blood vessels that nourish tumours.

The identity of the molecule remains a commercial secret, as do the terms of the agreement, but Cryptome's said it would involve Xantos making cash and milestone payments, and assigning IP rights to Cryptome for any new therapeutic candidates.

Cryptome chairman Graham Kelly described the deal as "a major milestone" in the company's history. "It demonstrates the novelty and utility of our core technology and the energy and imaginatin of our scientists, who have built a company delivering a platform and pipeline in less than three years," he said. "This is also the first step on what we expect to be a similarly rapid path to commercialise our technogy."

Kelly said Cryptome planned to out-license some of its drug candidates at a relatively early development stage, as well as doing deals with other companies like Xantos that wish to access its technology platform.

Cryptome's acting CEO, Prof Mathew Vadas, said the company was looking for other platform and pipeline interactions, and hoped to engage in more collaborations. "Happily, other people are seeking us out," he said. "It's not just a one-way situation."

Cryptome's drug discovery platform identifies the bioactive peptide fragments embedded in protein molecules, by using proteolytic enzymes to dissect them out for evaluation in in vitro cellular assays.

Cryptome's chief scientific officer, Vil Ilag, said many bioactive peptide fragments -- the company calls them 'crypteins' -- retain their native conformation and biological activity even when cleaved from the parent protein - many of the body's own bioactive peptides are activated only when they are released from their precursor proteins.

Ilag said the Cryptomics high-throughput technology offers a much faster and more efficient alternative to the traditional approach of deletion analysis to identify bioactive domains of molecules.

He described the technological and commercial 'fit' of the two companies as "almost ideal". Both had state-of-the-art technologies, and both had recognized the untapped therapeutic and commercial potential of protein therapeutics.

In a statement, Xantos CEO Stephan Wehselau said Cryptome's technology would rapidly add value to his company's research, by helping to identify the molecular basis of its angiogenic compound. One the active domains have been identified, chemists can design drugs to inhibit their activity.

-- Additional reporting by Ruth Beran