HAMBURG, Germany — In January, Develogen AG, one of the first companies to use recent findings in the genetics of developmental biology, was founded in Göttingen, Germany, by two German specialists in the field.

Using genes that trigger the development of insulin and glucagon secreting cells, Develogen's aim is to restore pancreatic cell function in diabetics and develop tools for the diagnosis and treatment of pancreatic tumors.

The company also will develop a systematic screen for relevant fat regulating genes and for drugs to treat obesity. With an expected DM15 million in investment, the company would be one of the highest valued start-ups on the German biotechnology scene.

The scientific founders, Peter Gruss and Herbert Jäckle, both are well-known specialists in developmental biology working at the Max-Planck-Institute of Biophysical Chemistry, in Göttingen. Gruss, managing director and head of the institute's department of molecular cell biology, has discovered hundreds of genes involved in the control of developmental processes and has focused on the role of mammalian Pax genes, a set of master control genes which are essential for organogenesis.

Jäckle, director of the institute's department of molecular developmental biology, has focused on the identification and study of genes underlying body pattern formation in Drosophila (fruit flies). He identified several prototype transcription factors which were found to be highly conserved in evolution. Besides, he invented a number of technical tools for developmental biology, such as those for cloning microdissected chromosome pieces and for using antisense to reverse genetics.

Both Jäckle and Gruss have received numerous awards and recognitions, including the German Leibniz Prize, the highest ranking research award in Germany. They are joined by Wolfgang Driever, of the University of Freiburg, in Germany, a specialist in zebrafish developmental genetics.

"The scientists involved have an outstanding track record," Herbert Stadler, CEO of Develogen AG, told BioWorld International. "They made vital discoveries in the field and felt time was ripe for commercialization." Stadler founded the biotech start-up HepaVec GmbH in 1996, and was involved in the founding of a number of other biotechnology companies in Germany. (See BioWorld International, Sept. 4, 1996, p. 1.)

Gruss told BioWorld International, "Basically, we are doing gene therapy, but we do not aim at specific genes coding for single enzymes or hormones but at master control genes that trigger the differentiation of distinct cell types. These genes have to be activated only for a short period of time to start the program."

Gruss explained this technique could initiate the formation of novel tissue de novo either in the body or externally for later transplantation. "In the case of diabetes, we hope to obliterate the need for insulin injection with our approach."

He said there are two reasons to select the pancreas as a therapeutic and commercial field: "First, the pancreas has a potential for regeneration already. There are certain cells which behave like stem cells under certain conditions. Second, around 30 million people suffer from diabetes worldwide, and pancreatic tumors are number four among the most common cancers causing death."

Develogen has identified four research areas:

* Development of methods for the successful transfer of Pax4 and Pax6 genes to form glucagon and insulin-secreting cells or even functional islets. Patients could then be treated by ex vivo gene therapy of pancreatic tissue and subsequent reimplantation of the modified cells.

* Identification of promotor-elements of Pax4 and Pax6 genes to trigger the activity spectrum of genes in pancreas cells. This information could be used to specifically activate or deactivate the respective genes within the body by appropriate small molecular drugs.

* Study of structural and functional changes of genes in pancreatic tumors to develop strategies to restore normal function.

* Systematic screen for genes involved in the regulation of the body's fat and weight control system to develop diagnostic and therapeutic tools for obesity.

Transgenic Animal Models Also Planned

In addition, the company will provide commercial services by the generation of transgenic animals by means of pronuclear injection and embryo aggregation techniques.

Gruss added that the basic studies on fat regulation and pancreas development will be performed on fly larvae or zebrafish. "Fly larvae, for example, build up fat deposits depending on their genetic make-up, and we can select and screen for mutants and suppressors. All these genes are highly conserved in evolution, and we are going to identify and use them in mice."

Stadler foresees a bright future for the new company. "Diabetes therapy is a highly interesting field commercially," he said. "However, very few companies have concentrated on reconstitution of islets using a genetic basis."

He added that another company, Ontogeny Inc., of Cambridge, Mass., uses a similar principle. "So in terms of competition, the field looks good. We believe to have a unique advantage, because the vertebrate Pax gene family has been discovered in the laboratory of the scientific founder and because we are in a strong patent position." Several patents are pending or have already been granted.