BioWorld International Correspondent

PARIS -Transgene SA and Merial Ltd. signed a collaboration agreement for the development of veterinary products based on Transgene's gene transfer vector platform.

The agreement calls for Transgene, of Strasbourg, to conduct research and development in the transfer and expression of genes selected by Lyon-based Merial, which will then carry out feasibility studies with different recombinant viral vectors in targeted veterinary indications.

Transgene's business development director, Valérie Calenda, told BioWorld International that the research phase would take 12 to 18 months to complete and was designed to establish proof of concept. She said Transgene would test the use of its vectors with a dozen or more genes selected by Merial in several undisclosed pathologies. The financial terms of the deal were not disclosed, but Calenda said that Merial will finance the research phase.

If proof of concept is effectively established, the companies would negotiate a long-term collaboration, during which they would conduct clinical trials. Calenda said a term sheet for the second phase had been drawn up, but details are not finalized. Transgene would grant Merial an exclusive worldwide license for products emanating from the collaboration.

It will be the first test of Transgene's gene vector platform in the area of animal health, and Calenda said it could represent a significant new source of revenue for the company. Merial, which already is conducting research in recombinant viral vectors, said it is a promising approach for animal therapeutics.

All five of the gene therapy products Transgene has in clinical development - two in Phase II, two in Phase I/II and one that has completed Phase I - are for human health applications, mainly in various cancer indications.

Transgene has yet to bring a product to market and its research and development activities burn some €20 million a year, said Managing Director Jean-François Carmier. Carmier said in late 2003 that the company had sufficient funds to last it until mid-2005, but that it would ideally seek another capital increase before the end of 2004, pointing out that if it raised a further €60 million to €80 million, as it did in early 2001, that would be sufficient to see it through to break-even.

Transgene is controlled by the Lyon-based diagnostics company BioMérieux SA and its chairman, Alain Mérieux, which have a 70 percent holding.