By Mary Welch

Staff Writer

Privately held Kimeragen Inc., which is developing chimeraplasty, a genetic surgery technology, will merge with Paris-based ValiGene S.A., to create ValiGen N.V., a European-American functional genomics company.

The newly formed ValiGen, which will be based in Rotterdam, the Netherlands, will identify and validate targets to facilitate the discovery and development of human health and agricultural products.

Terms of the merger were not disclosed.

"We have been silent for three years working hard on having something to announce," said Jean Louis Pourny, chairman and CEO of ValiGene S.A. "Our purpose is to set up a new style and a way to proceed. ValiGene is doing this merger in a way - a completely dramatic, very powerful way - that will validate our platform. We have created an integrated functional genomics system that spans the continuum from identifying genes associated with human disease or desired plant traits to validating the genetic targets used for the development of new life systems products."

The merged company will have an integrated system that incorporates proprietary genomics and informatics technologies. Privately held ValiGen will specialize in therapeutic target identification and validation and concentrate on genes important to disease processes or desired traits. It identifies genetic variability among groups of individuals and associates these differences with important phenotypes. It then proceeds with genetic pathway mapping and data mining to validate targets or intervention points that might speed up product development.

"Our system is really the first complete solution to fast and cost-effective in vivo target validation," Pourny said.

The new company will focus on several markets, including cancer, obesity/diabetes, cardiovascular disease, single-gene human diseases and crop improvement.

ValiGene's expertise in identifying and validating new diseases and desired trait targets fits with Kimeragen's aptitude in assessing intervention strategies for known targets, Pourny said.

Headquartered in Newtown, Pa., Kimeragen's technology is not gene therapy in the classic sense. Instead, it sets out to "repair" the genes by correcting a targeted gene directly in the body, plant, animal or bacterium. The technology is designed to fix dysfunctional DNA and restore normal gene function, with the rest of the genome left unaffected.

Chimeraplasty uses a living cell's own DNA repair mechanisms to make specific changes in a cell's DNA. The technique deploys a synthetic double-helix molecule of DNA and RNA strands, called a chimeraplast, with the sequence designed to match the target sequence but with one exception: It introduces a single mismatch intravenously.

The error triggers the cell's DNA repair system by binding selectively to the portion of the target DNA to be modified. Once bound, the chimeraplast activates a naturally occurring gene-correcting mechanism that modifies the DNA at the target site. In effect, the synthetic sequence rewrites the cell's genome.

Kimeragen has used its chimeraplasty technology mainly for agricultural purposes. The company and AgriBioTech Inc., of Henderson, Nev., joined together to develop enhanced turf grass and forage seed products. (See BioWorld Today, Dec. 31, 1998, p. 1.)

However, researchers at the University of Minnesota in Minneapolis used chimeraplasty to introduce a mutation in the hemophilia B gene in rodents. Kimeragen also has used this gene repair technique successfully to correct 25 percent of affected liver cells in hemophilic dogs.

Kimeragen had been working toward filing an investigational new drug application using chimeraplasty for Crigler-Najjar disease, a rare liver affliction in which patients become jaundiced, as well as for hemophilia and cholesterol metabolism. However, the new merged company will evaluate what the next steps will be concerning clinical trials.

Although the new company will be based in the Netherlands, the Paris and U.S. operations will continue, Pourny said.

"We have about 56 people in France, and in Newtown there will be no layoffs," he said. "We'll have about 100 employees. In fact, we'll be needing more people. We also will open an office on the West Coast for agribiological purposes."

Pourny will serve as ValiGen's CEO. Steven Burrill, chairman of Kimeragen, will be on ValiGen's board of directors as will Stephen Evans-Freke, a ValiGene co-founder and managing director.

The merger, Pourny said, will benefit both companies. "We know things that other people don't know how to do," he said. "We did this merger quite quickly because we want to have a different operation."