Regeneron Pharmaceuticals Inc. gained rights to a gene-switch technology from Artemis Pharmaceuticals GmbH in an effort to discover new therapies and build its pipeline.

The nonexclusive sublicense grants Tarrytown, N.Y.-based Regeneron the ability to use Artemis' gene-switch technology based on ligand-regulated DNA recombination, but only for internal research.

"This is a general license, which is not bound to a certain indication area or disease area," said Peter Stadler, managing director of Cologne, Germany-based Artemis. "This is a technology license, which they can use in whatever area that they want to in their pharmaceutical research and development activities, but they can only use it for internal purposes."

Regeneron cannot sublicense the technology, or do research with it for third parties. But it will use it in conjunction with its own Velocigene technology, which provides knockout and transgenic mammalian models of gene function.

"We've used that quite extensively over the years to help build our pipeline," said George Yancopoulos, chief scientific officer at Regeneron. "As a complement to this Velocigene technology, we wanted to be able to take advantage of some of the Artemis technology to take advantage of inducible knockouts."

While financial terms of the agreement were not disclosed, the deal includes a one-time payment to Artemis, then regular annual fees. It does not include milestone payments or royalties for Artemis. It is a straight deal, similar to other agreements made between Artemis and biotechnology companies, Stadler said.

The technology is called CreER, which stands for "cause of recombination, estrogen receptor." The gene switch that is built into a mouse is activated by feeding the mouse estrogen, Stadler said. The estrogen travels through the blood circulation system until it hits the receptor and switches off the gene.

"We can, in an adult mouse at a selected period of time in a selected tissue organ, just shut off the biological function of a selected gene," Stadler told BioWorld Today. "This is intended to give major insight in certain diseases processes and create the knowledge for researchers to develop new drugs."

Artemis acquired exclusive rights to the technology in September 1999 from the European Molecular Biology Laboratory (EMBL) in Heidelberg, Germany. The gene-switch technology was developed by Francis Stewart at EMBL based on the fusion of nuclear hormone receptors with DNA recombinases. It allowed the alteration of DNA in animals or cells upon delivery of small synthetic molecules. Stewart now is a scientific adviser to Artemis.

The CreER technology is part of the company's larger ArteMice Speed platform, which enables the mouse gene to be completely replaced by its human orthologe. When combined with shRNAi the ArteMice technology provides an efficient way to knock down gene expression in all tissues of the mouse in vivo.

While Artemis attained the gene-switch license from EMBL almost five years ago, it waited until last year, following its development of the technology, to begin marketing it through an out-licensing approach.

The company signed two agreements in July: one with Evotec Neurosciences GmbH, of Hamburg, Germany, providing access to ArteMice technology to assist in the generation of genetically engineered mouse models; and the other with Stockholm, Sweden-based Biovitrum AB for shRNAi knockdown transgenic mice for analysis of selected disease-related genes. Artemis also has similar agreements with Aventis SA, of Strasbourg, France; Merck & Co. Inc., of Whitehouse Station, N.J.; and Bayer AG, of Leverkusen, Germany.

Artemis was founded in 1998. In 2001, Exelixis Inc., of South San Francisco, made it a wholly owned subsidiary through a $23.1 million acquisition. (See BioWorld Today, April 24, 2001.)

Artemis' technology will enhance Regeneron's platform for drug discovery, while Regeneron continues to work in the clinic with its treatments for obesity, rheumatoid arthritis and cancer. The company also has preclinical programs in asthma, allergies and other diseases and disorders.

Regeneron's interleukin-1 Trap product failed to meet its primary endpoint in a Phase II rheumatoid arthritis trial last fall, but the company decided to continue development based on positive trends. It plans to start a Phase IIb trial in the second half of this year. However, the company's partner, Basel, Switzerland-based Novartis Pharma AG, decided to forgo its rights to jointly develop and commercialize the IL-1 Trap. The company has paid $102 million to Regeneron since the collaboration began in March 2003. (See BioWorld Today, March 31, 2003, and Oct. 8, 2003.)

Another product in Regeneron's pipeline - the VEGF Trap - is the subject of a deal signed last September, potentially worth $485 million, with Aventis. The product is being tested in Phase I trials in solid tumors and age-related macular degeneration. (See BioWorld Today, Sept. 9, 2003.)

At the Drug Discovery Technology Conference in Boston earlier this week, Yancopoulos said, Regeneron received "The Deal of the Year" award for its agreement with Aventis. VEGF Trap is one of the company's products that grew out of its Velocigene technology, he said. Another such product, IL-4/13 Trap, is being studied in asthma and allergy indications.

Regeneron's lead product, Axokine, met both primary endpoints in a pivotal trial last year, showing that more drug-treated patients lost at least 5 percent of their body weight and achieved a greater average weight loss, compared with patients treated with placebo.

But the degree of average weight loss was low, about 7 or 8 pounds over the period of a year. A subset of patients, however, lost more than 34 pounds over the year.

"Even though the average weight loss was rather modest, it looked like there were subpopulations of patients that looked like they really responded to the drug," Yancopoulos said.

Once it designs a study in that subset of patients, the company plans to initiate a confirmatory Phase III trial.

Regeneron's stock (NASDAQ:REGN) dropped 6 cents Monday to close at $6.90. Exelixis' stock (NASDAQ:EXEL) dropped 44 cents to close at $6.12.

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