LONDON — Therexsys Ltd., the U.K.'s first established gene therapy company, is changing its strategy and its name, following five and a half years in which it has made little progress in achieving the objectives set by its founders.

It is switching development effort from nonviral to viral vectors, and said it will change its name to Cobra Therapeutics Ltd. following acquisition of viral gene therapy company Cobra Biosciences Ltd. (CBL).

CBL was set up in 1997 to commercialize research at the University of Birmingham's Institute for Cancer Studies. Therexsys is making a cash payment and issuing shares and options representing 8 percent of its issued share capital, worth around £4 million overall, to pay for Cobra.

Under terms of the agreement, Therexsys will receive rights to certain intellectual property generated at the Institute for Cancer Studies over the next 10 years. In addition, the three founders of CBL will participate in development of Therexsys for at least the next three years.

Richard Moulson, chief financial officer, told BioWorld International, "What the acquisition of Cobra has done is to bring into the company expertise with adenoviruses. That's why we formed the dialogue. We felt that using adenoviruses would be a faster way of getting our first cancer products into man. It also reflects the feeling in the gene therapy community that the viral/nonviral split is not so absolute.

"Buying Cobra is a very effective way to get up the learning curve for viruses and broaden our technology platform."

Therexsys, which stands for Therapeutic Expression Systems, was founded in July 1992, with £400,000 of venture capital funding, to commercialize research carried out by the government-funded Medical Research Council and the Cancer Research Campaign, a charity.

The first round of financing was completed in November 1993, raising £6.4 million. In the second-round financing in 1996, the company set out to raise £8 million to £10 million and came away with £22.5 million.

Therexsys was formed around Locus Control Region (LCR) technology. Each cell type has its own characteristic LCR, a stretch of DNA that is responsible for regulating the expression of other genes. The theory was that by attaching the therapeutic gene to an LCR, it would be possible to target genes at the cells where they are needed, and switch them on when they get there. In addition, the level of expression is related to the number of copies of the therapeutic gene.

At the time of the second round of fund raising, Therexsys, then led by CEO Martin Preuveneers (who joined the company from London-based Glaxo Wellcome plc), said it would get its first product into clinical trials in 1997, and get a full listing on the London Stock Exchange in the same year.

However, progress stalled as Preuveneers, then the founding scientist, Roger Craig, resigned, leaving Therexsys without a permanent leader for most of 1997. David Bloxham took over as chairman last month.

Commenting on the failure to achieve the 1996 objectives, Moulson said, "With LCR we could do brilliant transfection in the test tube, but in animal models transfection was limited, and it was not competitive with viral rates. We are putting a lot of effort into understanding why. We will continue with our nonviral program and are still committed to getting good, nonviral delivery.

"However, we want to add value to the company; at the moment we have no clinical trials going on."

Clinical Trials Expected In '99

Cobra has generated preclinical data showing in vivo delivery of marker genes to tumor cells using adenoviruses, and Therexsys expects this will allow it to progress rapidly to clinical trials, delivering anticancer genes in man by 1999. It also will apply the technology to DNA vaccines.

Therexsys retains control of the LCR patents and Moulson expects the technology eventually will fulfill its promise. "The pot of gold is unlikely to come from viral delivery," he said. "Nonviral delivery is where we see the long-term future, but we're a commercial company and we want to produce products on a shorter time scale."

There have been inquiries from people interested in using LCR technology, and one aim is to start generating license income. Therexsys also has made a big investment in the DNA manufacturing capability at its headquarters in Keele, U.K., and intends to develop this as a source of income.

Moulson said there is enough money to fund the 57-person company until 2000. "The plan is that the next round of fund raising will be an initial public offering."