By Mary Welch

When the option to expand its $100 million, five-year deal with the former Corange International Ltd. — acquired earlier this year by Hoffmann-La Roche Ltd. — ended in May, Gene-Medicine Inc. started talking with other potential collaborators for developing non-viral gene therapies for cancer.

One of those interested turned out to be Roche and the two companies not only renewed the Corange collaboration, but extended it. The original pact was to explore gene medicines for head-and-neck cancer. Now the two will investigate three gene medicines using three genes in all areas of cancer through 2002.

The companies will use the genes for interleukin-2 (IL-2), interferon-alpha (IFN-a) and interleukin-12 (IL-12) to develop non-viral gene therapies for use alone, in combination with each other, and with treatments such as chemotherapy.

Since the beginning of the Corange collaboration, GeneMedicine has received $18.9 million in research and development money.

"We're not announcing a big money deal, nor is it a new agreement. It is a successful extension of an agreement," said Norman Hardman, president and chief operating officer of GeneMedicine, in The Woodlands, Texas. "Roche will cover all our R&D costs through trials and will help us fully develop the products."

As part of the contract's expansion, Roche, of Basel, Switzerland, will take what would have been additional equity payments and funnel them to research and development.

Lipids, Polymers, Peptides Carry Gene Load

GeneMedicine's focus is using gene therapy to deliver genetic instructions to targeted cells in the body to produce sustained levels of therapeutic proteins or desired immune responses. The company's non-viral gene delivery vectors employ lipids, polymers and peptides.

Phase I trial results of the IL-2 gene therapy, released in July, showed it was safe and well tolerated in head-and-neck cancer patients. Significantly, the study also demonstrated the IL-2 protein was expressed for several days in treated tumors.

IL-2 is a powerful cytokine but its usefulness in direct administration to patients is limited by its two-hour half-life. Frequent dosing also has resulted in intolerable toxic side effects.

In the Phase I study, the gene therapy was injected into tumors. The cytokine was tolerated at the tumor site and was effective for several days after a single administration.

"It's an interesting story and one that works out well for GeneMedicine and Roche," Hardman said.

In 1995, GeneMedicine entered a potential $100 million agreement with Hamilton, Bermuda-based Corange. Corange agreed to pay $20 million over five years in equity investments and fund R&D development with $25 million. The deal also included milestone payments and the possibility of another $12 million in equity investments. Corange was the parent company of Mannheim, Germany-based Boehringer Mannheim GmbH. (See BioWorld Today, July 19, 1995, p. 1.)

"The original deal was in two stages," Hardman said. "The first was an evaluation period where we developed our technology. Then we started developing our products in two indications exploring the three genes. Then there was an option to expand into all areas of cancer."

In early 1997, GeneMedicine received FDA approval to start trials of IL-2 gene therapy, triggering a $500,000 milestone payment from Corange. About that time a $4 million equity investment also was made.

In May 1997, Roche agreed to buy Corange for $11 billion. The takeover was completed in early 1998.

"A year ago, Corange and Roche went into an 'underwater' period where they couldn't communicate [until the merger was approved]," Hardman said. "We needed to wait until the deal was consummated before we could negotiate with Roche about whether or not to extend the collaboration.

"The option ended in May and we started talking with other potential collaborators about developing cancer gene medicines utilizing genes other than those three we were working on with Corange," Hardman said.

When Roche was legally able to talk with GeneMedicine it obviously liked what it saw.

"They realized the assets of Corange's investment," Hardman said. "The IL-2, IFN-a and IL-12 gene therapies each include a Roche technology relating to those genes.

"Plus," he added, "Roche was impressed that we were on track with each of the genes. IL-2 should enter Phase II by the end of the year and we expect to file an IND [investigational new drug] application for the other two, with IFN-a's being filed by the end of the year and IL-12 in the second quarter of 1999. They took this all as very positive."

GeneMedicine's Other Partnership Options Expand

The collaboration's research efforts will focus on starting a Phase II trial for the IL-2 gene therapy and doing preclinical work and a Phase I/II trial for the other two. Upon successful completion of one of the trials, GeneMedicine has the option to either receive up to 50 percent of profits by agreeing to share development and commercialization expenses or to receive royalty payments based on worldwide product sales.

GeneMedicine has demonstrated the IL-12 gene therapy inhibited the growth of lung metastases and increased survival while the IFN-a product reduced the tumor size in renal cell cancer in animals.

In addition, the treatment with IL-12 and IFN-a, in combination, resulted in tumor-free survival of all animal subjects, even when rechallenged later with cancer.

Another bonus for GeneMedicine is that, under the revised contract, it can enter into partnerships with other companies in the field of gene therapy for cancer using different genes — something it could not do with Corange.

GeneMedicine's stock (NASDAQ:GMED) closed Wednesday at $2.50, unchanged. *