PARIS - A French start-up focusing on a novel method for treating cancer has set up shop in Paris following the completion of an initial funding round.

Called Molecular Engine Laboratories, it has raised FFr25 million (US$3.6 million) from three European venture capital funds: France-based Ventech and Odysee Ventures, and Frankfurt, Germany-based 3i-Technologieholding.

The company is exploiting the discoveries of its two top scientists, President Adam Telerman and Robert Amson, vice president for research and development. They have worked on exploring the genetic and molecular mechanisms behind a rare phenomenon observed in some tumors, with a view to developing anticancer therapies. The once-in-a-million phenomenon is the spontaneous arrest of tumor development in which tumor cells simply cease to be cancerous. An estimated 100 genes are involved in this tumor reversion process, of which 25 have been identified and patented, both for their anticancer applications and more generally for their role in controlling cell life and death.

As Molecular Engine's chairman, Claude Hennion, told BioWorld International, it purchased the patents from the French Center for Human Polymorphism Studies (CEPH - Centre d'Etudes du Polymorphisme Humain), a semi-public research establishment where Telerman and Amson worked until the beginning of this year. After signing a final agreement with its three investors on Feb. 25, the patents were officially transferred to MEL on Feb. 28, and Telerman, Amson and their research team followed on Feb. 29. Since then, the company has recruited specialists from several different countries and now has a workforce of 18.

Hennion stressed the uniqueness of Molecular Engine's approach, pointing out that ''99.9 percent of the research in cancerology is focused on understanding how a cell becomes cancerous,'' not on how it stops being cancerous. Molecular Engine intends to identify all 100 genes involved in the gene reversion process, and Hennion said it now is working on identifying another batch of 25 "reverting'' genes and expects to have the results within a couple of months. The method it uses entails multiplying the "reverting'' cells and comparing the genes they express with those of the malignant parent cells. After identifying the genes activated in the reverting cells, the company will consult gene banks to obtain the complete sequence, or will sequence them itself using its ABI 3700 sequencer, which uses the most up-to-date capillary electrophoresis technology.

Among these sequenced genes, MEL hopes to find 10 or so that code for therapeutic proteins and aims to take them into clinical development within three to four years. The company's strategy is to take prospective drugs as far as Phase II and, if those trials are successful, to license their further development to third parties. He stressed that each product could have several applications since it could be adapted to different families of cancers and even to individual patients. He also pointed out that the cell reversion process is not confined to cancers but has been found in Alzheimer's disease as well. However, Molecular Engine does not intend to develop therapies for that pathology but to license out applications to pharmaceutical companies.

Hennion said Molecular Engine was actively negotiating with a number of companies with a view to entering into scientific and technological collaborations and assigning exclusive licenses for specific applications. In particular, it was in "advanced discussions with Genset . . . and we expect to announce the conclusion of an agreement within the coming month.''

A significant part of the funds raised was used to purchase the patents from the CEPH, although Hennion said they had been partly paid for with stock options. Hence, although the company's burn rate is around FFr2 million a month, it is seeking additional research funding from French state agencies, such as the National Research Promotion Agency, and plans to launch a second funding round in October or November. ''Several candidates have already expressed an interest,'' Hennion said.

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