By Mary Welch

In a multimillion deal, Nexell Therapeutics Inc. entered into a strategic alliance with Takara Shuzo Co. Ltd. to produce a commercial gene therapy and, separately, to distribute exclusively Nexell's cell therapy products in four Asian countries.

"There are actually two deals, and another is being contemplated," said Tad Heitmann, Nexell's vice president of corporate communications. "The first is a distribution deal, with a multimillion dollar payment to us, so that Takara will distribute all of our four product line areas in Japan, China, Korea and Taiwan. The second is a development agreement."

Nexell was formed by Wilmington, Del.-based Vimrx Pharmaceuticals Co. and Baxter, the principal operating subsidiary of Baxter International Inc., of Deerfield, Ill. Vimrx later acquired Baxter's interest in the venture and merged all its operations into Nexell. (See BioWorld Today, Jan. 19, 1999, p. 1.)

Nexell's products use antibodies linked to magnetic beads that recognize the CD34 antigen on stem cells. The products consist of a device (magnetic beads) and a drug (antibodies) that are used for either positive selection of a desired target cell population, or negative selection and removal of cells that potentially are harmful to the patient, such as T cells.

The company is developing and marketing ex vivo cell therapies and in vitro diagnostics for cancer, autoimmune, metabolic and genetic diseases.

Based in Irvine, Calif., Nexell has four major product lines - detection, selection, expansion and modification, and storage.

Its lead product, Isolex 300I Magnetic Cell Selection System, is the only FDA-approved device commercially available for the selection of hematopoietic stem cells and the removal of tumor cells from autologous peripheral blood as a component of aggressive cancer treatment. It also markets the Cytonex ICC staining kit and an extensive line of cell therapy preparation, storage and expansion products including Cryocyte, SteriCell and Lifecell brands.

"This is significant because Takara is a marketing company," Heitmann said. "They obviously believe in the technology and are putting their money on the table to be a part of it for the next five years."

The development agreement is aimed at producing a commercial gene therapy platform by combining the Nexell Lifecell X-Fold cell culture container with Takara RetroNectin (recombinant human fibronectin fragments). RetroNectin-coated Lifecell X-Fold containers have allowed the production of genetically modified hematopoietic stem cells for transplantation with transduction efficiency up to 80 percent, the company said. "Our data indicate that the success rate is five to 10 times greater when you put the two products together," Heitmann said.

The agreement between Nexell and Kyoto, Japan-based Takara involves future co-development and marketing of major new product platforms for cell expansion and manipulation, including Cellextra, a fully automated cell culture system now in the prototype stage at Nexell. Major research laboratories, such as the National Institutes of Health, would be logical customers, Heitmann said.

"We have to work with Takara to come up with an appropriate format for the product for its distribution by Takara in Asia," Heitmann said. "There is an agreement for a revenue split, but we're not disclosing it.

"Asia is an untapped market in cell therapy. It's pretty young here and in Europe, but it's not even born in Asia. This is so significant again because Takara wants to be involved in the early-stage opportunity in Asia."

The two companies are negotiating a third deal involving cell expansion products and platforms.

"We're not saying when we might expect the next deal," Heitmann said. "We just got married - give us some time!"

Nexell's stock (NASDAQ:NEXL) closed Tuesday at $5.781, up 76.57 cents, or 15 percent.