By Randall Osborne

As it awaits the launch by a licensing partner of its genetic test for liver disease, Progenitor Inc. has signed another deal — this one with Affymetrix Inc., to identify the gene variations associated with asthma.

Under the terms of the deal, Menlo Park, Calif.-based Progenitor, a gene discovery and functional genomics company, will provide asthma genes for screening. Progenitor is building a database of full-length, functionally characterized genes derived from the DNA of asthma patients, along with single cell complementary DNA (cDNA) libraries from bronchial and inflammatory cells.

Affymetrix, of Santa Clara, Calif., will design custom DNA probe arrays with its GeneChip technology to find the variations, or polymorphisms, in the genes, and then will screen the samples using the custom chips.

"Each side does its own work," said Mark Bagnall, Progenitor's vice president for finance and chief financial officer, although the two companies will analyze the data together.

The collaboration gives Progenitor an option for exclusive rights to therapeutic and diagnostic applications of any products developed, and Affymetrix an option for diagnostic applications.

In preparing the DNA samples, Progenitor will use methods developed and proven effective during earlier collaborations with Affymetrix by Mercator Genetics Inc., also of Menlo Park. Progenitor acquired Mercator last August. (See BioWorld Today, Aug. 8, 1997, p. 1.)

Mercator "had come up with a technology for enriching patient samples, so you could determine from blood samples specific pieces of DNA," Bagnall said. "When you take an asthma chip — or any chip with a predetermined set of genes — the patient samples would more closely match up with the samples on the chip. It's a much cleaner test."

Affymetrix's deal with Mercator was proof-of-principle, carrying no terms, ownership rights or royalty arrangements.

"We've taken it a step further and refined it," Bagnall said.

In Progenitor's initial public offering (IPO), also completed last August, the company priced 2.75 million units at $7, for gross proceeds of $19.25 million. The units, consisting of a common share and a warrant for another share, split immediately and traded separately.

Last September, Progenitor collaborated with SmithKline Beecham Clinical Laboratories Inc. (SBCL), of Collegeville, Pa., which licensed exclusive rights to Progenitor's test for hereditary hemochromatosis, which is linked to cirrhosis and liver cancer, among other conditions. Mercator discovered the gene that made the test possible. (See BioWorld Today, Sept. 23, 1997, p. 1.)

The disease, characterized by an abnormally high iron level in the blood, currently can only be confirmed by liver biopsy. SBCL, a subsidiary of SmithKline Beecham plc, of London, will perform the noninvasive test for about $175.

"The test is very, very close to being launched," Bagnall said. "From what we understand, it's pretty much ready to go."

On the day of its IPO, Progenitor's shares (NASDAQ: PGEN) closed at $5.062, down $0.563. Warrants (NASDAQ: PGENW) closed at $1.25, down $0.25. The company's shares closed Monday at $2.25, up $0.375. Warrants closed at $0.50, up $0.25. *

No Comments