BioWorld International Correspondent

LONDON - Just days after Cambridge Antibody Technology Group plc said it settled its long-standing feud with Abbott Laboratories over Humira royalty payments, the firm picked up the clinical portfolio of Genencor International Inc. for $14 million worth of CAT shares.

The deal gives CAT two products, with one in Phase II development, and a first foothold in the U.S. In addition, the deal furthers CAT's ambition to focus on oncology in its internal research and development programs. The Abbott settlement brought CAT $255 million. (See "CAT, Abbott Settle Humira Dispute; Abbott Pays $255M," this issue.)

The former oncology team at Genencor, comprising 10 members, has been taken on by CAT. For now, they will be based at Genencor's existing site in Palo Alto, Calif., but the intention is to transfer them to a separate CAT facility in the area.

The products, GCR-3888 and GCR-8015, consist of a murine antibody fragment that targets the CD22 receptor on B-lymphocytes, fused to a toxin molecule, Pseudomonas exotoxin PE38.

They work by releasing the toxin intracellularly, after the whole immunotoxin has been internalized via the CD22 receptor.

GCR-3888 and GCR-8015 were discovered and initially developed by the National Cancer Institute. They were licensed from the National Institutes of Health by Genencor in December 2004 under a Cooperative Research and Development Agreement (CRADA).

GCR-3888 has shown efficacy in a 46-patient Phase I trial in hairy-cell leukemia (HCL), and is in a Phase II trial in the same indication. GCR-8015, optimized to have increased affinity for CD22, is in preclinical development as a treatment for B-cell malignancies, including non-Hodgkin's lymphoma and chronic lymphocytic leukemia.

Peter Chambré, CEO, told BioWorld International the acquisition is significant in three respects.

"There is proof of the mechanism in HCL," he said. "The products are in an oncology indication where we can take optimized candidates forward ourselves, and they are at the right stage of development for us to take them on."

CAT will pay Genencor $14 million on closing, which is expected to be Nov. 4. Simultaneously, Genencor will pay $14 million for 1.2 million new CAT shares, equivalent to about 2.3 percent of CAT's existing share capital. CAT may be liable to pay a further $2 million for bulk product for GCR-8015 if the material is suitable.

Chambré said that paying the cash to Genencor so they could give it back in return for shares was simplest way of handling the transaction.

Genencor announced that it was to divest its clinical development arm in August. That followed a decision to focus on the industrial enzymes business after its acquisition in April by the Danish food ingredients and sugar processing company Danisco A/S.

Under the original license with the NIH, CAT will have rights to a portfolio of intellectual property related to the products and will pay royalties to NIH. Chambré said CAT will maintain the CRADA agreement, which gives the company an important relationship in the U.S.

The NIH is paying for three trials of GCR-3888 that are under way, while the understanding is that CAT will fund two trials of GCR-8015 once it reaches the clinic, and the NIH one trial.

Before that, CAT has to spend the next year doing manufacturing development for GCR-8015 at its headquarters in Cambridge, UK.

Chambré did not wish to comment on whether, having landed, CAT has ambitions to expand its U.S. base, but did say the new recruits from Genencor, "provide a core of oncology development expertise to CAT for the future."