By Kim Coghill

Washington Editor

Cerus Corp. and the Pharmaceutical Division of Kirin Brewery Company Ltd. entered a collaborative research agreement to develop stem cell transplantation products directed toward hematologic malignancies based on Cerus' Helinx technology.

The products in development, possibly for leukemia and lymphoma, will be designed to improve the outcome of stem cell transplant therapy through the use of leukocytes (white blood cells) that have been treated with Helinx. This proprietary technology targets and locks DNA or RNA and is intended to prevent replication of viruses, bacteria and other pathogens.

The companies will jointly develop the products, and Cerus will receive an initial license fee of $1 million plus up to $11 million in milestone payments, Stephen Isaacs, president and CEO of Concord, Calif.-based Cerus said. Kirin, of Japan, will fund development expenses for the Asia-Pacific region and a portion of Cerus' development activities aimed at obtaining product approval in the United States. Kirin will market the products in the Asia-Pacific region, including Japan, China, Korea and Australia, and the companies will share revenue downstream under a "very substantial revenue-sharing agreement," Isaac said. Cerus retains marketing rights in the rest of the world, including the U.S. and Europe.

Cerus' stock (NASDAQ:CERS) closed Wednesday at $70, up $3.

Kirin was selected for the partnership because of its successful marketing program and proven track record with Amgen Inc., of Thousand Oaks, Calif., Isaac said. Kirin is responsible for marketing Amgen products Epogen and Neupogen in Asia.

Isaac said Cerus' collaboration with Kirin likely will result in several products, and already, preclinical trials are showing positive results.

Stem cell transplantation, a cancer treatment, carries a risk of an often-fatal complication known as graft-vs.-host disease. The condition arises when the donor's leukocytes, transfused to promote acceptance of the donor's stem cells, proliferate and attack the transplant recipient's tissues and organs. The collaboration will focus on use of Helinix-treated leukocytes to promote stem cell engraftment, while reducing the serious risk of graft-vs.-host disease. The Helinx technology inhibits the proliferation by targeting and binding with the DNA of leukocytes.

Cerus is conducting a Phase I clinical trial of this technology as part of its Allogeneic Cellular Immune Therapy (ACIT) program.

Cerus' Intercept Blood Systems, its most advanced program, focuses on enhancing the blood supply. Trials are under way in the United States: a Phase III trial for platelets, a Phase III trial for plasma and a Phase Ic trial for red blood cells. Phase I trials also are under way for the use of Helinx-treated leukocytes to improve the outcome of stem cell transplants.

Cerus and its development and commercialization partner, Deerfield, Ill.-based Baxter Healthcare Corp., have submitted a CE Mark Application for marketing approval of the Intercept Platelet System in Europe.