REHOVOT, Israel - XTL Biopharmaceuticals Ltd. agreed to test an Eli Lilly & Co. drug candidate in XTL's proprietary animal model for hepatitis C.

"The XTL technique could significantly accelerate the development and commercialization of drugs to treat hepatitis C, a serious infectious disease that afflicts over 170 million people worldwide," Zachi Berger, chief operating officer of XTL, told BioWorld International.

The evaluation will use XTL's TrimeraXTL technology, which enables a mouse to carry human liver fragments infected with hepatitis C virus. XTL's chimeric animals have functioning human immune systems able to tolerate human tissue and cellular grafts without rejection. Fully human monoclonal antibodies can be elicited.

"This novel test system allows the validation of clinical utility for disease treatment before embarking on costly human clinical studies, which would reduce significantly the time and money needed to develop novel drugs to treat hepatitis C," Martin Becker, XTL general manager, said of the technology licensed from the Weizmann Institute.

XTL has just initiated a clinical trial in hepatitis B patients using a combination of two fully human anti-HBV monoclonal antibodies developed utilizing the TrimeraXTL technology, said Berger, who is also chairman of the Israel Biotechnology Organization.

XTL has raised $17 million in several financing rounds. The deal with Eli Lilly is the first significant sale of an XTL system to a pharmaceutical company. Financial terms were not disclosed.