The reasons for MLNM's massive rally are numerous, including the recent announcement of a two-year extension of its antibacterial collaborations with Wyeth-Ayerst Research, the principal pharmaceutical research and development division of American Home Products Corporation.

This is the fifth corporate partnership that Millennium has extended this year.

The two companies have worked successfully together to identify numerous novel targets and move them into screening. Millennium's five-year strategic alliance with Wyeth-Ayerst to discover and develop antibacterial drugs for human use began in December 1996.

Since then the two groups have focused their attention on the identification of bacteria. Millennium will receive royalties on the sale of any products derived from the collaboration.

Worldwide sales of drugs to treat bacterial and fungal infections totaled almost $20 billion in 1998, making it the second largest pharmaceutical market.

Wyeth-Ayerst Research is a major research oriented pharmaceutical company with leading products in the areas of women's health care, cardiovascular and metabolic disease therapies, central nervous system drugs, anti-inflammatory agents, vaccines and generic pharmaceuticals.

Millennium Pharmaceuticals (MLNM - NASDAQ) and the Whitehead Institute for Biomedical Research discovered a novel protein involved in fat absorption.

The protein, FATP4, plays a role in transporting fatty acid molecules from the intestines into the body. Inhibition of the protein's function may provide new approaches to treating obesity.

FATP4 is a member of a family of fatty acid transport proteins and is expressed at high levels in enterocytes, a cell-type found in the intestinal lining. The addition of human FATP4 to cells where the protein is not normally expressed resulted in a large increase in the uptake of fatty acids.

Inhibition of FATP4 with anti-sense oligonucleotides in a mouse enterocyte cell-culture model produced a proportional reduction in the uptake of these fatty acid molecules.

The transport of fatty acids from the intestines into the body is a key step in the absorption and metabolism of dietary fat and its conversion to body fat.

The identification of the intestinal fatty acid transport protein provides new insight into the molecular and biochemical pathways involved in the transport and utilization of dietary fat.

It is possible that therapeutic approaches based on blocking the function of FATP4 may be more efficacious and may mitigate certain unpleasant side effects associated with the currently available drug.

In the United States, more than half of adults -- 97 million people -- are overweight or obese. Human obesity greatly increases the risk for the development of diabetes, heart disease, high blood pressure and stroke.

Millennium and Bayer AG have identified 18 interesting targets, have already moved four into screening and anticipate that six more targets will be in screening by the end of the year. The focus of the alliance is not merely on identifying large numbers of targets, but rather on selecting high quality targets that may become drugs. Understanding these targets and achieving a disease hypothesis is of paramount importance.

The companies are making excellent progress toward this goal.

Of the US$465 million investment Bayer is making in Millennium, up to US$368.4 million consists of a combination of guaranteed funding and performance fees for the drug targets identified and a license fee for the use of the genomic technologies developed by Millennium.

The remaining US$96.6 million was paid by Bayer as an equity investment representing approximately a 14% interest in Millennium. In addition, Bayer will pay royalties to Millennium on the sale of any marketed products.

As the Human Genome Project gets closer to completion, shares of Millennium should appreciate fantastically.

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