By Mary Welch
Oxigene Inc. will spend up to $20 million to fund research in a joint venture with Techniclone Inc. aimed at developing vascular targeting technologies based on both companies' technologies.
The joint venture, Arcus Therapeutics LLC, will fund the work of Philip Thorpe, a professor of pharmacology at the University of Texas Southwestern Medical Center and the inventor of Techniclone's Vascular Targeting Agent (VTA) technology. Under the agreement, Techniclone, of Tustin, Calif., will supply the intellectual property and the expertise of Thorpe, along with the most promising lead candidates he has developed to date.
Oxigene will spend up to $20 million to fund Arcus' development expenses. Any subsequent costs will be split equally between the two companies. In addition, Oxigene paid a $1 million up-front licensing fee, and will purchase $2 million of Techniclone's common stock at the current market price.
Oxigene also will pay another $1 million in cash and buy $1 million in Techniclone stock upon the filing of an investigational new drug application (IND) for the first clinical candidate developed by Arcus.
Arcus intends to sublicense the technology to other companies for applications that would not conflict with the joint venture's combination strategy. If any sublicensing fees are generated within the joint venture, Techniclone will receive 75 percent of the income and Oxigene 25 percent, until Techniclone has received $10 million. After that, the joint venture partners will share licensing fees on a 50-50 basis. Any royalty income or profit will be shared equally.
Oxigene, based in Boston and Stockholm, Sweden, will license to the joint venture its next generation of tubulin-binding compounds specifically for use in combination with Techniclone's VTA technology.
"We believe we are the only company with our technology that has a product in the clinic," said David Sherris, Oxigene's chief operating officer and director of drug development. "We wanted to make sure that we corner the market, so you naturally start looking at competitors. You keep your eyes open. We found that Techniclone was the most developed along in their program. We decided to work together."
The joint venture's goal is to combine the technology to target tumor blood vessels more specifically by using antibodies and other targeting agents, which would increase their therapeutic potential, he said.
Techniclone's VTAs are based on targeting molecules that bind specifically to vascular endothelial cells in tumor blood vessels. Techniclone's technology calls for the targeting molecule to be linked to one of several different types of effector molecules - including drugs, coagulants, radioisotopes and toxins - which kill the tumor by starving it of oxygen and nutrients.
Oxigene's technology is based on combretastatin antitumor vascular targeting agents. Its lead compound is combretastatin A4 Prodrug (CA4P), which is in Phase I/II trials.
Combretastatin compounds, including CA4P, may selectively target existing blood vessels at tumor sites, which cut off the tumor's blood supply and deprive it of oxygen and other necessary nutrients. The drugs act by binding selectively to tumor vessels and triggering a thrombotic cascade, culminating in the formation of a fibrin plug within the tumor vessels. Blood flow to the tumor stops, causing massive tumor cell death.
CA4P is being developed for potential use either as a stand-alone therapy for solid tumors that require blood vessels for survival, or in combination with chemotherapy and radiation to enhance the effectiveness of the treatment.
Oxigene licensed its combretastatin antitumor vascular targeting agents to Bristol-Myers Squibb Co., of New York, in a deal worth up to $70 million. (See BioWorld Today, Dec. 17, 1999, p. 1.)
"We have two totally different technologies that give the same end result - blood flow stoppage to existing vascular targets," Sherris said. "One difference is that theirs is a biologic while ours is a small molecule."
Sherris estimated that it will take Thorpe about two more years in the clinic working on the technology and Oxigene's next-generation tubulin-binding components before Oxigene takes over the next step in development. Oxigene then will conduct further research before filing an IND. Oxigene will be responsible for all clinical trials, regulatory filings and commercialization.
"We will figure out how to take the two technologies and put them together to make them complementary," Sherris said. "But we believe this joint venture will form the premier vascular targeting entity in the world."
Oxigene's stock (NASDAQ:OXGN) closed Wednesday at $12.562, down 43.75 cents. Techniclone's stock (NASDAQ:TCLN) closed at $4.062, up 31.25 cents.