• Atugen AG, of Berlin, received two milestone payments from Altana Pharma AG, of Konstanz, Germany, as part of a validation alliance for new target molecules associated with cancer and diseases of the immune system, signed in 2001. The milestone payments stem from the validation of the first two targets from Altana using Atugen's GeneBloc technology. Atugen developed specific antisense molecules that inhibited gene expression and validated the function in oncology assays. Financial details were not disclosed.

• Australian Parliament members decided to permit the use of excess IVF embryos for medical research. After extensive debate, federal legislation permitting such research was passed by the Senate with a substantial majority. The lower house, the House of Representatives, had already passed the legislation, also with a clear majority. Members of Parliament were allowed a rare "conscience" vote, meaning that they did not have to obey normally strict party lines.

• Axxima Pharmaceuticals AG, of Martinsried, Germany, secured €1 million from the German Federal Ministry for Education and Research to fund research activities. The project will last three years, as part of the ministry's program on new procedures for functional proteome analysis. Axxima develops techniques to analyze specific proteins, and the technology developed with the grant's support should improve understanding of the molecular causes of disease. Specifically, the company will investigate protein kinases, proteins involved in cellular communication and in switching on or off the activities of other proteins. Axxima is privately held and has raised a total of €56 million in three rounds of funding since its founding in 1997.

• BioCity Nottingham in the UK, a new biotechnology innovation and incubation center, officially opened its doors Tuesday. BioCity claims to be the largest dedicated biotechnology incubation center in the UK, with 12,000 square meters of space. The center is based in Nottingham Trent University, and also has links to the University of Nottingham.

• Celltech Group plc, of Slough, UK, terminated its collaboration in cystic fibrosis with Targeted Genetics Corp., of Seattle, giving back full rights to tgAAVCF, which is currently in Phase II trials. Targeted Genetics said it is now talking to other potential partners. The agreement was originally established in 1998, between Targeted Genetics and Medeva plc, of London. Celltech took on the collaboration when it acquired Medeva in January 2000.

• Cytos Biotechnology AG, of Zurich, Switzerland, said an initial round of immunization with its first Immunodrug product was well tolerated in a Phase I trial involving 24 healthy volunteers. The study was designed to assess the safety and tolerability of one of its Immunodrug carriers, a virus-like particle derived from the RNA phage Qb. The Immunodrug concept is based on presenting antigens to the immune system in highly repetitive arrays, in order to elicit a sustained immune response. In the current study, the participants received an injection of Derp1, a model antigen derived from a house dust mite allergen. Three participants reported mild local irritation at the injection site, while no systemic side effects were reported. The subjects will receive additional booster shots at four and 12 weeks, and antibody and T-cell responses will be monitored for a full year.

• Genmab A/S, of Copenhagen, Denmark, said it identified a lead compound, HuMax-TAC, in a newly disclosed therapeutic antibody development program for organ transplant rejection. The program is directed at the interleukin-2 receptor (or TAC) target. By blocking this site, it can prevent binding of IL-2, one of the key regulators of immune system function, and thereby inhibit T-cell proliferation. The company said its lead compound appears to display superior inhibition of IL-2 binding to the IL-2 receptor as compared to at least one antibody product already on the market. It also blocked the proliferation of activated T cells that express the receptor. Genmab said the molecule also has potential application in graft-vs.-host disease, T-cell leukemia, Hodgkin's disease and autoimmune diseases.

• Neurotech SA, of Paris, published positive preclinical efficacy results from a proof-of-concept study of the use of its Encapsulated Cell Technology (ECT) for the treatment of chronic eyes diseases. The study tested the cell-based delivery of ciliary neurotrophic factor (CNTF) in animal models of retinitis pigmentosa, demonstrating that it slowed the progression of retinal degeneration. Neurotech has an exclusive license from Amgen Inc., of Thousand Oaks, Calif., for the development and commercialization of CNTF for local delivery in ophthalmology indications. It plans to file an IND application for its CNTF delivery product, NT-501, in the first quarter of 2003. In August the company said it was to focus solely on ophthalmology, effectively shifting its center of gravity across the Atlantic since all its ophthalmologic research and development takes place at the Lincoln, R.I., research facility of its American subsidiary, Neurotech USA Inc.

• NeuTec Pharma plc, of Manchester, UK, said it completed recruitment into the first stage of its double-blind Phase II trial of Mycograb in the treatment of invasive candidiasis. To date, 21 patients have been entered into the trial, there have been no adverse events reported and the pharmacokinetic data confirms the current dosing regimen is appropriate.

• Pharmagene plc, of Royston, UK, said its lead product, PGN52, a synthetic version of the human peptide hormone secretin, has entered Phase I trials. The company specializes in drug discovery services using human tissue for testing compounds at the preclinical stage. CEO Alastair Riddell said the entry of PGN52 into the clinic validated the company's technology. "PGN52 has taken less than three years to reach the clinic from project initiation. This is a significant reduction to the industry norm of six to seven years," he said.

• Prolysis Ltd., of Oxford, UK, announced a three-year drug discovery agreement with Evotec OAI AG, of Hamburg, Germany, for Evotec to design and synthesize compounds to novel antibiotic targets developed by Prolysis. Under the deal, which has a headline value of €5 million, Evotec will receive fees and be given a small equity stake in Prolysis.

• Scil Proteins GmbH, of Halle, Germany, completed a proof-of-principle study demonstrating that Affilines, its scaffold for protein construction, are suited as innovative binding proteins. The study showed that it is possible to generate customized proteins based on the scaffold that display binding properties against predefined target molecules. The company is positioning Affilines as an alternative to antibodies and reports that it has low production costs and advantageous protein chemistry. The company also was awarded €200,000 from the state government of Saxony-Anhalt to develop an innovative therapeutic for cartilage regeneration.

• Vectura Ltd., of Bath, UK, a specialist in powder formulations for pulmonary drug delivery, completed a £6.9 million (US$10.8 million) funding round and announced a collaboration with GlaxoSmithKline plc, of London. The Merlin Biosciences Fund LP and ISIS Capital/ISIS Asset Management led the round, each investing £2 million. The money is expected to allow the company, founded in 1997, to progress five products into the clinic in the next 18 months. Under the GSK deal, Vectura's Aerocine and associated powder formulation technologies will be assessed in inhalers for treating inflammatory and constrictive diseases of the airways. Vectura will receive fees during the initial program, and license fees, milestones and royalties if GSK uses the formulation technology for its respiratory products.