LONDON — Oxford BioMedica has become the first U.K. gene therapy company to agree to a significant commercial deal, with the signing of an exclusive license with Rhone-Poulenc Rorer (RPR) Gencell, worth up to £11 million (US$18.4 million), if all milestones are reached. The license covers the use of the Hypoxia Response Element (HRE), a control mechanism designed to turn genes off or on in response to oxygen levels in the body, in RPR's cardiovascular gene therapy products.

Under the terms of the deal, Oxford BioMedica will receive research funding, milestones, and royalties on sales of RPR products which incorporate the HRE technology. In addition, RPR has agreed to make an equity investment in Oxford BioMedica.

Alan Kingsman, CEO of Oxford BioMedica, told BioWorld International the agreement is "very significant for the company. It is the first proper deal. Some people have said we are a bunch of academics who don't know how to make money. We've shown that's not true. It will bring in substantial revenues over the next few years, and provides us with a route to a $4 billion market."

In another boost, the company received approval from the U.K.'s Gene Therapy Advisory Committee (GTAC) of its proposed trial of MetXia-P450T, a gene-therapy construct incorporating the HRE in breast cancer. The trial will test the delivery of the gene for the human cytochrome P450 enzyme, which Oxford BioMedica says should result in the localized activation of the anticancer drug cyclophosphamide. GTAC oversees gene therapy trials in the U.K., and assesses the suitability of clinical protocols for human trials.

This will be the first trial in the U.K. to use retroviral gene-delivery vectors produced from human cells, a method expected to confer greater activity on the vectors in vivo than the established production method using animal cells.

Kingsman noted that he has received "a cast-iron assurance" that the deal with RPR Gencell is not affected by the merger of the parent company, Rhone-Poulenc SA, of France, with the German company Hoechst AG to form Aventis, a life sciences company with combined sales of $20 billion.

Oxford BioMedica, which is listed on London's Alternative Investment Market, acquired HRE last year from Sheffield University. RPR Gencell aims to use it, with both viral and non-viral vectors, in gene therapy approaches to treat coronary artery disease and peripheral arterial disease, by stimulating growth of new blood vessels in areas where existing blood vessels have become diseased and have ceased to function. Because hypoxia is an intrinsic phenotype of ischemic diseases, the HRE system can be designed to ensure that new blood vessels will grow only where they are needed, and will not continue to grow once a normal blood supply has been established.

RPR Gencell has agreed to provide a minimum of US$1million in research funding over the first two years of the collaboration. "The HRE system is at a very advanced stage, and the money RPR is providing will be used to tweak the system," Kingsman said. "We know already that we can use it to control a wide range of genes in a range of different vectors and a wide range of tissues, and have used it to achieve exquisite control over switching genes on and off in response to levels of oxygen."

In addition, RPR Gencell will subscribe for 1.5 million Oxford BioMedica shares at 20 pence per share, a 100 percent premium on the closing price Dec. 9. The company will also subscribe for additional Oxford BioMedica shares on the achievement of certain milestones, all at a 10 percent premium to the then market price.

Oxford BioMedica retains the rights to license HRE in other indications and Kingsman said, "We are in discussions with a number of other companies in relation to doing deals around HRE." *