Washington Editor

Lexicon Genetics Inc. is earning $35 million through a new public-private partnership to create a mouse embryonic stem cell library for a new genomics organization in its home state of Texas.

"It allows us to increase our ability to collaborate with academics," Brian Zambrowicz, the company's executive vice president of research, told BioWorld Today. "The genome is a big place, and it's important to be able to maximize the amount of discoveries."

The Texas Enterprise Fund, a $295 million state investment vehicle, allocated the funds to build and eventually house a library of 350,000 sequence-tagged cell lines, which Lexicon said would be the world's largest collection of mouse embryonic stem cells engineered for studying gene function. Carol Schafer, its vice president of finance and communications, said the project would take about three years.

"Each line would have one mutation," Zambrowicz said, "and we estimate that that would cover about 70 percent of all genes."

The library's development lays the foundation for the newly formed Texas Institute for Genomic Medicine, a non-profit organization created to allow researchers to identify promising genes for future drug development by creating a knockout for every embryonic stem cell gene.

"It also exploits some of our basic core technologies," Zambrowicz said, "and we've been able to do that in a number of ways to help us bring in monetary resources along the way."

The company will create the library using its gene trapping technology, which uses genetically engineered retroviruses that infect mouse embryonic stem cells in vitro and integrates into the chromosome of the cell and disrupts the function of the gene into which it integrates. Institute researchers also may access specific cells from Lexicon's current gene trap library of 270,000 mouse embryonic stem cell lines. And they also will have certain rights to use Lexicon's gene-targeting technologies. That portfolio includes a number of U.S. patents, Zambrowicz said, that will give the institute the ability to knock out the other 30 percent of genes that won't be contained in the original library.

Also, Lexicon will provide the institute with company-generated bioinformatics software required to manage and analyze data relating to the library.

Another benefit of the institute's creation is the hope of it developing a magnetic appeal that would lead to new biotech companies throughout the state and to attract researchers, venture capital and grant funding. Lexicon, of The Woodlands, Texas, is among its founding members, along with Texas A&M University and the Texas A&M University System Health Science Center.

Eventually, the institute will make cells from its library available to researchers worldwide. Its facilities will be located in Houston at the Texas A&M System Health Science Center's Institute of Biosciences and Technology and in College Station at Texas A&M University.

In addition to the funding allotted for Lexicon, the Texas Enterprise Fund also awarded $15 million to the Texas A&M University System to develop facilities and infrastructure to house the library. Its total $50 million contribution to the Texas Institute for Genomic Medicine represents the high-water mark for such grants doled out by the fund, equal to another of the same sum.

For Lexicon, which posted a $13.3 million net loss for the quarterly period ended March 31 and had $70.7 million in cash and investments at that time, the Texas Enterprise Fund award will come as a single payment. Schafer said the money would be booked as revenue over time, as compensation for creating the library and providing its associated software.

Also, she stressed that the Texas Institute for Genomic Medicine work would not pull resources from Lexicon's existing drug development programs. "It does not detract from our ability to meet our drug development objectives," Schafer said, adding that the gene-trapping technology "is an asset that we've been able to build over time" that can be monetized independently of other operations within the company.

Apart from its new project, Lexicon involves its technologies in a number of discovery partnerships, including a newly formed arrangement with XOMA Ltd., of Berkeley, Calif., and deals with Genentech Inc., of South San Francisco; Bristol-Myers Squibb Co., of New York; NV Organon, part of Akzo Nobel in Oss, the Netherlands; and Takeda Pharmaceutical Co. Ltd., of Osaka, Japan. The company also is developing its own drug candidates, with a preclinical portfolio that includes a small molecule labeled LX-1521 for cancer and a recombinant human protein called LX-5431 for thrombocytopenia, a condition that results in bleeding disorders.

On Monday, Lexicon's shares (NASDAQ:LEXG) gained 5 cents to close at $6.14.

No Comments