As it prepares to move into Phase II testing with its lead immunotherapeutic in HIV, Australian biotech company Virax Holdings Ltd. licensed exclusive North American rights to its gene-expression technology to Transgene SA, which is developing its own immune-based therapies targeting cancer and human papillomavirus (HPV).

Transgene, of Strasbourg, France, had been working on those products - TG4010 and TG4001 - but needed a license to avoid infringing on Virax's U.S. and Canadian patents relating to its Co-X-Gene technology. Under the terms, Virax will receive an undisclosed license fee and will share in fees and milestone payments if Transgene partners those products. Altogether, Virax could get as much as $12 million, with up to $9 million of that stemming from development of TG4010, which is in Phase IIb trials in non-small-cell lung cancer, and the remaining $3 million for TG4001, which is set to start Phase III against HPV-associated pathologies.

Virax also would be entitled to royalties on North American product sales.

It's the first time the Melbourne, Australia-based firm has licensed rights to its Co-X-Gene platform, and CEO David Beames called the deal "an important milestone for us and for the class of [immunotherapeutic] products."

Described as an approach that aims to direct a patient's immune system against specific cells, such as those infected with viruses or cancer cells, immunotherapies have shown promising early results, indicating that they might be effective particularly in difficult-to-treat indications without producing the side effects of standard treatments. But immunotherapy is still in its early stages, in part because viral vectors, which are used to express the genes needed for treatment, are "tricky to make," Beames said.

He likened the immunotherapeutic field to the "monoclonal antibody space in the early to mid-1990s. Everyone was rather skeptical then, but now [antibodies] have become hugely successful."

"We and Transgene believe that, one of these days, that [success] will occur in this space," he added.

Both companies are developing immunotherapeutics using the Co-X-Gene technology, which is designed to express and simultaneously release two genes inside a human cell to both target a particular disease and elicit a specific immune response. But Transgene uses a modified vaccinia ankara (MVA) viral vector to express the genes, while Virax uses fowl pox vectors.

While that does create some competition, the space still is young enough so that "anyone's success is everyone's success, " Beames told BioWorld Today. "That will help give better visibility to the area and help us attract partners. So we'll be watching with interest as Transgene develops and probably partners its products."

Virax' own lead product, VIR201, has completed Phase I/II testing in HIV. VIR201 involves a fowl pox vector into which the gag and pol disease antigen for the HIV virus has been inserted alongside the interferon gamma cytokine. The vector then is grown in chicken cells, harvested and injected into patients. From there, it enters human cells and produces tiny amounts of gag pol protein and interferon gamma in the cell, Beames said.

"The net results is that these work together to produce T cells that are specific, which, in this case, go after any cell infected by the HIV virus," he said.

The company awaits funding to begin two Phase II studies of VIR201, one in the U.S. and Canada, and one in South Africa. The South African trial will be funded partly by a mining syndicate led by diversified resources company BHP Billiton.

Virax's second program, VIR501, is targeting late-stage hormone-refractory prostate cancer. In that case, a fowl pox vector was engineered to include a tumor-specific antigen plus a cytokine. VIR501 is expected to begin Phase I/II testing in mid-2008, pending adequate funding.

Once through Phase II, Virax intends to out-license the products to a larger partner for Phase III development and commercialization.

The company, which posted a net loss of A$2.3 million for the six months ending Dec. 31, ended 2006 with about A$2.2 million in cash, though it hopes to bring in additional funding through an anticipated listing on the London Alternative Investment Market (AIM). While Virax is publicly traded on the Australian Stock Exchange, the AIM listing is a "market in which more institutional investors are prepared to invest in biotech," Beames said, as opposed to ASX investors who tend to favor Australia's big mining industry.

Virax hopes to gain that listing and close the financing round later this year.

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