PARIS - British pharmaceutical giant Glaxo Wellcome plc negotiated a collaboration agreement with a small French biotech company called Thallia Pharmaceuticals SA, which developed a process for extracting pharmaceuticals and functional foods from microalgae and is building a photosynthesis facility for producing therapeutic compounds.

Thallia's agreement with Glaxo, which is similar to one it signed with Pharmacia & Upjohn, of London, in January, provides for it to supply extracts of microalgae for London-based Glaxo to screen in its laboratories with a view to discovering new chemical entities with therapeutic potential. The collaboration is not focused on any particular therapeutic targets, whereas the agreement with Pharmacia & Upjohn specifically concerns applications in the field of animal health.

The financial terms of these agreements have not been divulged, although Thallia's chairman and CEO, Alain Gilbert, was prepared to say both companies will provide it with R&D funding.

Gilbert stressed that the company's long-term strategy is to move up the added-value ladder toward doing its own screening and product development.

Thallia Pharmaceuticals, based in Ecully, near Lyons, in southeastern France, owns or has access to one of the largest collections of microalgae in the world, and also possesses a number of patents relating to the production and use of microalgae.

Marketing Agreements Expected By June

As well as providing the pharmaceutical industry with microalgae extracts for drug discovery purposes, the company is engaged in the pilot production of metabolites from microalgae for functional food applications, for which marketing options are under consideration. These substances also have the potential to become pharmaceutical products after further development.

Founded in 1992, the company originally was called Héliosynthèse, and that is the name on its technology patents for the intensive culture of microalgae. It changed its name in November 1996, nine months after trebling its equity capital from FFr10 million to FFr30.85 million ($6.05 million) and its total shareholders' funds from FFr32 million to FFr42 million.

Most of its present shareholders came on board then. They include seven venture capital companies, five of them French. The lead investor is Sofinnova, with a stake of more than 20 percent, and the next biggest shareholders are Alta-Berkeley II CV, CDC Innovation and 3i plc. Between them they hold 57 percent of Thallia on a fully diluted basis.

Thallia obtained a further FFr15 million from its shareholders at the end of 1997, which, according to Gilbert, brought to FFr56 million ($9.3 million) the total cash raised by the company since its inception.

Gilbert, who joined Thallia in September 1997, told BioWorld International he hopes to get existing shareholders to put up another FFr15 million very shortly, and he will attempt to raise FFr40 million more in the middle of the year, when other companies probably will become shareholders.

The newcomers are likely to be companies that Thallia does business with, such as American marketing companies interested in the food supplements it is developing.

“We are in contact with five to seven marketing companies in the U.S. and expect to conclude two or three major marketing agreements between now and June,“ said Gilbert.

Partner Sought For Delivery System

The first product Thallia expects to bring to market will be zeaxanthin, an oxycarotenoid that could play a key role in preventing age-related macular degeneration, a condition that contributes to the development of blindness in the elderly.

Its other main research program involves the development of lyso-phosphatidylcholine-docosahexanoic acid (lyso-PC-DHA), a vector for delivering the polyunsaturated fatty acid DHA to the brain and the eye.

Thallia conducts its research activities in three laboratories near Paris and Lyons and also collaborates with an international network of research establishments and universities in Europe and the U.S. In particular, it has close links with the department of applied biology at Arizona State University, in Tempe, which is researching the genetic manipulation of algae.

At the same time, Thallia is developing manufacturing facilities at Tarbes, in southwestern France, which will utilize its Héliosynthèse technology for the continuous, controlled autotrophic production of microalgae biomass using a closed, self-cleaning tubular photobioreactor. Among the cultures it uses is Porphyridium cruentum, which is highly efficient for producing carotenoids under controlled conditions.

The company also possesses a proprietary heterotrophic production process for the production of DHA as triglycerides and phospholipids. The technology, which it acquired from a third party and developed further, involves conventional fermentation without light, for which it uses a culture called TP4 that produces large amounts of the acid. It has patented DHA-containing phosphatidylcholine and short-chain triglycerides for cardiovascular and neurological applications on the strength of studies in 1996 and 1997.

Those trials demonstrated DHA's ability to cross the blood-brain barrier, said Gilbert. Thallia now is looking for a corporate partner to develop this delivery system, which has both nutraceutical and pharmaceutical applications. *

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