By Randall Osborne

As talks continue for SangStat's Medical Corp. to acquire a new transplant business in France, the company has formed Human Organ Sciences (HOS), a wholly owned subsidiary focused on tissue engineering research.

HOS will pursue development so-called Mini-Organs, functional human organ tissues grown in vitro, as an alternative to experimental animal organs (xenotransplantation) for addressing the limited supply of solid organs from human donors.

"It's an implication that we're not going to create whole, big, identical organs," said David Winter, president and CEO of the new company, which (like SangStat) is based in Menlo Park, Calif.

"You don't need the whole organ to do the function," added Winter, who formerly served as president and chief operating officer of SangStat and remains as chairman of the company's board for scientific, medical and ethical affairs.

The new company will focus first on developing liver tissue in vitro.

"That's the easiest one to do," Winter told BioWorld Today. A fairly small amount of liver tissue may work to help patients, in a therapy similar to kidney dialysis.

"The liver is, in a way, like a filter, as opposed to the heart, which is a contractile organ," Winter went on. "It could be, initially, outside [the body]. If we can engineer it correctly, it would be inside."

HOS also will start development of pancreas tissue.

Establishing the new company lets SangStat move ahead with research while keeping a rein on the parent company's expenditures, but the move was not strictly a paperwork protection of resources, Winter said.

"It could be looked at that way, but the reality is that it's clear we have to start focusing on the company's longer term," he said. "There's so much focus on xenografts, but it's far more complicated than people thought it would be. It will be a long time before we see much happening in that field, and we've got do something for these patients."

In April, SangStat said it was in "advanced talks" to buy Imtix, of Lyon, France, from Pasteur Merieux Connaught, which is part of the Paris-based Rhone-Poulenc Group. (See BioWorld Today, April 16, 1998, p. 1.)

"That's moving very nicely along," Winter said.

Meanwhile, SangStat will build HOS using research and development personnel from the parent company.

"We're going to evolve slowly, with a relatively few number of internal people," Winter said. Partnerships will add external staff, he added, and the company will continue to grow "along that model."

As of March 31, SangStat had $83.4 million in cash, with a net loss of $6.6 million. The company's stock closed Tuesday at $28.25, up $2.812. *