Joined by way of a research synergy and therapeutic focus, a U.S. biotech firm is partnering with a large Japanese brewery to develop dendritic cell-based remedies.

Merix Bioscience Inc., an immunotherapy vaccine company, agreed to collaborate on therapies using dendritic cells with the pharmaceutical division of Kirin Brewery Co. Ltd., which is developing products for renal disease, cancer and immunological disorders. To that end, each party will contribute between $45 million and $65 million during the first three years of the agreement.

Clint Dederick, Merix's chairman, president and CEO, said the deal was two years in the making. He added that Kirin was drawn to Durham, N.C.-based Merix's technological base and scientific support that stems from research collaborators in the U.S. and Europe.

"I think the breadth of our technology is what's compelling," Dederick told BioWorld Today, "either as a defined approach or a total-tumor RNA approach to cancer, but also to antivirals, transplantation and autoimmune disorders."

He said Tokyo-based Kirin will provide its experience from numerous other biotech partnerships, and also is expected to play a role in automating Merix's technological process.

Freedom from a now-dismissed lawsuit also is allowing the collaboration to move forward. Kirin resolved its litigation with Geron Corp., another Merix partner, through a settlement that does not involve a payment by either party and has no effect on the existing license agreement between Geron and Merix.

"We were working with both companies simultaneously," Dederick said. "It was part of the negotiating process . . . but there's really nothing material to talk about coming out of it."

As a result, Kirin and Merix initially will conduct research and development on dendritic cell vaccines for cancer and HIV. Under the collaborative agreement, the companies will use Merix's platform technology for RNA-loaded dendritic cell technology, which uses RNA from all of a patient's tumor antigens.

"The challenge was to have a technology that can put all of those advantages into a professional, antigen-presenting cell, the dendritic cell," Charles Nicolette, Merix's vice president of research and development, told BioWorld Today. "To do that starting with the tumor material, if you're using the tumor cells themselves, all the other approaches out there that are trying this strategy require a great deal of tumor material. Our technology, on the other hand, uses an amplification process of the RNA molecules that encode all the antigens. So it's a very small tumor sample."

Dederick added that the RNA-amplification process essentially produces an unlimited supply of antigens.

Should resulting products reach the market, Merix and Kirin would share worldwide profits, though the companies' commercialization work is specified to certain territories. Merix would market products in the U.S. and Canada, while Kirin would commercialize them in Asia. Opportunities in Europe and the rest of the world would be decided jointly.

The collaboration includes a product already in clinical development: a total-tumor RNA-loaded dendritic cell vaccine in a 16-patient Phase I/II trial for renal cancer.

Also as part of the agreement, Kirin made a $5 million equity investment in privately held Merix, equal to an ownership stake of about 5 percent, and will gain a seat on Merix's board. Dederick said terms of the investment were equal to Merix's Series B round of private financing in 2001, in which the company raised about $40 million. He added that Merix, which has drawn about $45 million in total venture capital investments since its 1997 inception, is preparing to raise additional funding in the near term.

"We're hoping to get a range from $15 million to $25 million," Dederick said. "That will put us in an excellent financial position, with Kirin paying half our burn rate going forward . . . So while we still need to raise money, the pressure is obviously off in terms of the amount of money we need to raise."

The 55-employee company maintains subsidiaries in Erlangen, Germany, and Amsterdam, the Netherlands. Outside its latest collaborative arrangement, Merix has other programs moving forward through internal development and with other partners.

At its German site, a scientific collaborator has studied applications of the company's technology in melanoma, while collaborators at the Amsterdam Medical Center will test the technology's use in HIV patients. Merix has applied for a $22 million grant from the National Institutes of Health in Bethesda, Md., to offset costs of developing the HIV product.

Other programs going forward will evaluate the technology for esophageal cancer, multiple myeloma and leukemia. Its deal with Geron allows the Menlo Park, Calif.-based company to use Merix's technology in cancer vaccines that have telomerase as an antigen.

"One of the interesting things about this technology is that we're not limited to solid tumors," Dederick said. "All we have to do is make sure we can get access either to a cancer cell or a virus."

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