West Coast Editor
Medgenics Inc.'s initial public offering in the UK, raising £3.28 million (US$6.76 million), positions the firm to test its Biopump drug-device combo method for delivering erythropoietin in Phase I/II trials by the middle of next year.
The firm, which has offices in Vienna, Va., and in Karmiel, Israel, licensed Biopump technology from Hebrew University in 2000, said Andrew Pearlman, CEO of Medgenics. "They had been working on it for five or seven years before that," he said, and Medgenics has invested $26 million in the approach so far.
Selling about 104 million shares at 10 pence each in the IPO leaves the firm with a market capitalization of about £10.4 million (£27.6 million on a fully diluted basis), enough to finish the Phase I/II proof-of-concept trials with the EPO Biopump product, called Epodure.
The Biopump platform amounts to a toothpick-sized protein "factory" derived from a patient's own tissue that, after being made outside the body, produces therapeutic proteins inside the body for longer-term treatment of chronic diseases that could include many beyond anemia, such as multiple sclerosis (by providing interferon-beta over an extended period), hemophilia (Factor VIII, Factor IX and Factor X) and pediatric growth hormone deficiency/muscular atrophy (human growth hormone).
Physicians harvest four or five slivers of tissue from below the patient's skin, using a local anesthetic in the doctor's office. A non-immunogenic adenoviral vector is used to put the appropriate gene into the tissue's cells and spur the cells to make the desired protein - thus converting the tissue into a Biopump, designed to maintain therapeutic protein levels in the blood for up to six months or more.
Tests are done during processing of the slivers outside the body to determine the daily protein production from each Biopump, so the right number of Biopumps is implanted back into the patient after a week or two.
"It's really beyond gene therapy," Pearlman told BioWorld Today. "The problem with [gene therapy] is you have no idea how many cells will pick up the gene and how much protein will be expressed. But what we do is entirely outside the body - we use living, breathing, intact tissue."
Cells pick up the gene ex vivo but remain intact within the structure, called a micro-organ. The strategy "addresses all the problems of gene therapy," allowing for dose adjustments by ablating inserted structures or inserting more, while avoiding gene therapy's potential for trouble, Pearlman said.
Stephen Dunn, analyst with Dawson James in Boca Raton, Fla., finds merit in Medgenics' approach.
"You typically don't want to administer a virus (used to insert the gene) into the bloodstream (even a deactivated adenovirus) because of the immune possible response," he said. "But a virus is currently the best way to deliver a gene today. The question [for Medgenics to solve] is, how many Biopumps need to be implanted to achieve a therapeutic effect, and how long does the effect last?"
Already large and still growing, the protein-therapy market is forecast to reach $87 billion by 2010. Behind the EPO product, Medgenics has another Biopump in the works to provide sustained interferon-alpha levels to treat hepatitis C virus, and could start Phase I/II trials in 2009. Other indications where the Biopump might be used include arthritis, wound healing, obesity, chronic pain and cancer recovery.
Medgenics is expected to begin trading on the AIM market of the London Stock Exchange Dec. 4, under the symbol "MEDG."
In other financing news:
• Caprotec Bioanalytics GmbH, of Berlin, obtained €4.5 million (US$6.6 million) from the VC Fonds Berlin GmbH, which is managed by the IBB Beteiligungsgesellschaft, the ERP Startfonds and private investors, to support further development and marketing of its CCMS platform technology for the pharma and proteome analytics market. Caprotec was founded in 2006 to commercialize the CCMS technology in the areas of proteomic research and development and the development of protein biomarkers.
• Scolr Pharma Inc., of Bellevue, Wash., entered agreements to sell about 2.7 million shares of common stock at $1.50 per share. Buyers also would get five-year warrants to purchase an aggregate of about 1.3 million shares, exercisable at $2.10 per share. Proceeds, along with available cash, are sufficient to fund operations through early 2009, the company said. The sale price is about 25 cents below the stock's closing price Wednesday, and Scolr shares (AMEX:DDD) ended Thursday at $1.51, dropping 24 cents, or 13.7 percent.