By Lisa Seachrist

Washington Editor

WASHINGTON — Matrigen Inc. and Prizm Pharmaceuticals Inc. have joined forces to form Selective Genetics Inc., a gene therapy company specializing in tissue repair and regeneration.

The deal is a simple merger of the privately held firms that combines the two companies' core technologies. Matrigen, a virtual biotech company, brings its proprietary Gene Activated Matrix (GAM) technology to the new venture, while San Diego-based Prizm joins the new company with a proprietary fibroblast growth factor (FGF) gene targeting technology (Directin).

Selective Genetics will be based in Prizm's San Diego facilities. Prizm's president and CEO, Steven Mendell, will serve as the new company's chairman and president. Matrigen's president and CEO, Robert Abbott, will take over as Selective Genetics' CEO.

"Matrigen and Prizm is an ideal match because there is not a lot of redundancy between the two companies," Mendell said. "The merger really allows us to broaden our opportunities and increase the opportunity for success."

The merger came about as Abbott was searching for a means to develop Matrigen as a specialist in highly localized gene therapy. While the promise of gene therapy is great, the technology has yet to make a major impact in health care. Abbott notes that the challenge in gene therapy is dosing.

"We are already pushing the limits in the volume we can deliver because of manufacturing constraints and toxicities," Abbott said. "The notion of delivering a liter of fluid to a hemophiliac in an attempt to correct genetic flaws isn't practical. It certainly won't work if you intend to use it for tissue regeneration."

In trying to use gene therapy to aid in tissue regeneration, the genes of interest must be delivered in high concentration to the site of repair — and stay there. Matrigen's GAM technology utilizes DNA embedded in a matrix to deliver genes to an isolated area.

Prizm's Directin technology uses FGF-2 linked to plasmid DNA or viral vectors as a targeting agent. The FGF-2 receptor is found in only two types of cells, tissue repair cells and malignant cells. As a result, genes attached to FGF-2 are targeted to those cells. In addition, the binding between FGF-2 and its receptor has the highest affinity in the body and outperforms monoclonal antibody binding by a hundred-fold.

"I am not aware of any targeting agent that, at a theoretical level, could be better," Abbott said. "And, they could achieve transfection [delivering the genes to the target cell] rates between 10 and 50 percent. It was a perfect match in technologies between the two companies."

Selective Zeroes In On Tissue Regeneration

Selective Genetics will use the combined technologies to seek gene therapy methods for helping the process of tissue regeneration to prevail. As Abbott describes it, the body abhors an unintended empty space. So, the body uses two methods to fill gaps in skin, bones and nerves: filling the space at all costs as in scarring, or replacing the space with the specialized tissues that previously filled the hole. Essentially, those two processes race to fill in the gaps.

"It used to be thought that nerves don't regenerate," Abbott said. "But, now we know that nerves do regenerate, just very slowly. The fibrosis, or scarring, process always beats them out."

In addition to nerve regeneration, Selective Genetics will explore using gene therapy to help complex bone fractures to heal as well as uses for diabetic ulcers.

Wound healing and tissue regeneration will be the primary enterprise for Selective Genetics, though the technologies also lend themselves to cancer applications. Abbott maintained that it is more likely that the company will develop a successful gene therapy treatment enhancing the normal process of wound healing rather than trying to intervene in the abnormal events that cause cancer.

"If we double the rate of wound healing we are contributing significantly to the well-being of a patient," Abbott said. "In cancer, killing half of the malignant cells is not enough. I don't hold cancer out as our lead foot."

Nevertheless, Directin technology will enter Phase I/II clinical trials for ovarian and prostate cancer late this year or early next year as a result of work by Prizm. Selective Genetics intends to have tissue repair gene therapy in the clinic as early as 1999.

"We have a goal to be the first billion-dollar market capitalization gene therapy company," said Mendell. "And we want to do it by the year 2005." *