By Matthew Willett

XTL Biopharmaceuticals Ltd. bought 20 percent of the pathogen functional genomics company iviGene Corp., and, in addition to accessing the company's antigen protein expression identification technology, it gained an option to purchase the remainder of the company.

XTL, of Rehovot, Israel, paid $1 million for 20 percent of Florida-based iviGene and access to iviGene's in vivo-induced antigen technology (IVIAT). It also will fund certain research activities over the next year and a half.

XTL can acquire the rest of iviGene for $4 million in cash and $16 million in XTL shares. XTL said the technology, which provides for in vivo pathogen genetic expression and expressed protein identification, will allow it to develop both monoclonal antibodies and small-molecule therapeutics for treatment of viral, fungal and bacterial infections.

XTL's general manager and chief business officer, Glenn Kazo, told BioWorld Today the acquisition is structured in phases to provide incubation for iviGene.

"It's an early stage company in the start-up mode, and the role, to an extent, that we're playing is as a corporate partner providing capital for iviGene's start-up," Kazo said. "We're looking for technology that will provide us with a variety of disease targets."

IviGene's technology, developed at the University of Florida, fits with XTL's, he said, in that they both begin with the diseased patient's blood serum.

"IviGene uses patient serum to identify a target for a particular disease," he said. "We use patient serum for monoclonal antibodies for treatments. The combination is great for providing therapeutic products. The goal for us is to have it provide an ongoing stream of targets and develop those into monoclonal antibodies and small molecules."

XTL's strength is in its animal models. Kazo said XTL's monoclonal antibody production technology is different than the techniques of others in the field.

"It's very different from the transgenic technology from the more well-known companies," he said. "What we have is a way of putting functional human tissue into mice. Depending on what tissue we put in is what product we can make. If we put human immune cells in, we generate antibodies in the mice. If we put in diseased tissue, we have a way of developing animal models to test for infectious diseases."

And those animal models are paying the bills for XTL, generating a revenue stream from six partnerships at the most recent count, including Dyax Corp., of Cambridge, Mass.; Hybrigenics SA, of Paris; AVI BioPharma Inc., of Portland, Ore.; F. Hoffmann-La Roche Ltd., of Basel, Switzerland; and Eli Lilly & Co., of Indianapolis.

Kazo said he couldn't estimate a time frame for complete purchase of iviGene, but he could hint at the initial areas of investigation.

"We're funding research in a specific area. We're focused on infectious disease compounds, antibacterial and antifungal targets," he said. "As for specific therapeutic areas, we're not yet ready to talk about that." n