By Debbie Strickland

Genetronics Biomedical Ltd., a San Diego company founded in the early 1980s to supply researchers with electroporation devices, is now applying its technology to chemotherapeutic drug delivery.

Mid-term clinical trial results suggest the technique -- until recently used for in vitro molecular biology research -- could allow oncologists to cut some patients' chemotherapy dosages by 98 percent, thus dramatically reducing the side-effects associated with the cytotoxins. Initial clinical results also show improved effectiveness even at these low doses.

Genetronics, which also has a corporate office in Vancouver, British Columbia, is preparing for a multicenter pivotal trial of its drug delivery method in late-stage head and neck cancer patients for whom other alternative treatments have been exhausted.

"The company has a broad platform technology and is very well protected by patents in the therapeutic area," said co-founder Gunter Hofmann, who serves as chief scientific officer and chairman of the board.

The company's therapeutic MedPulser device delivers a series of six pulses, each lasting less than a millisecond, to a tumor site. The electric field causes pores to appear in cell membranes, making them temporarily much more permeable. While the pores are open, a locally administered chemotherapeutic agent can enter the cells.

In the case of head and neck cancer, the MedPulser is used to facilitate tumor absorption of bleomycin. In a pilot study at Chicago's Rush-Presbyterian-St. Luke's Medical Center, all nine electroporation-treated patients exhibited tumor shrinkage.

An added benefit is the potential for improved quality of life.

"Head and neck cancer is a particularly devastating disease," said Lois Crandell, Genetronics' president and CEO. "It can severely limit the ability to talk, breathe, chew, hear, see, taste or swallow. Since the tumor is often visible, patients can become reclusive and profoundly depressed."

Some patients treated with electroporation reported brief sensations of tingling and muscle twitches, but compared to full-assault chemotherapy, "it's fairly benign," said Crandell.

She described one patient, an avid golfer, who was suffering a recurrence of cancer in the nasal cavity. He was back on the green the morning after treatment.

"He had gone through a very debilitating and disfiguring surgery three years prior [when the cancer was first diagnosed], then his cancer recurred in the same area, so this patient really understood the difference between the two alternatives," she said. "He was one happy camper."

Pivotal Trials Planned

The company is now ready to begin the pivotal trial, which will comprise 50 to 75 patients at two Canadian sites and five to seven U.S. sites.

The two key endpoints will be tumor shrinkage at three months and quality of life. The trial could be completed and data analyzed in 18 months, if patient recruitment goes well. A new drug application to the FDA will follow. Genetronics has asked for orphan drug status, which would give marketing exclusivity for seven years.

The company also has conducted human studies of the electroporation-chemotherapy combination with these cancers: basal cell carcinoma, melanoma, Kaposi's sarcoma, adenocarcinoma, squamous cell carcinoma and pancreatic cancer. Ex vivo gene therapy and dermatology applications are also under development.

For the near term, though, the first priority is the head and neck cancer indication.

To fund its clinical research and development program, centered on delivery of already approved generic drugs, the company this spring closed a public offering totaling 1.955 million shares. Priced at C$4.30 per share, the offering yielded gross proceeds of C$8.4 million.

Warrant-holders exercising share purchase options bought another 1.3 million common shares for C$4.2 million.

These transactions raised the company's outstanding share total to 18.7 million, and the fresh infusion of equity investment gives Genetronics $12 million in cash as of May 31.

Sales in the BTX Instrument Division, which markets electroporation devices to the research community, rose 20 percent in 1996 to $3 million, with a gross profit margin of 62 percent.

Overall, though, due to the research and development burn at the Genetronics Inc. drug-delivery division, the company reported a loss of $3 million in 1996, up from $1.9 million the previous year.

Genetronics (GEB.V), which is listed on the Vancouver Stock Exchange, has traded in the C$4.50 range in recent weeks.

Focus On Treatment Considered Positive

Although in the short term the therapeutic program is soaking up instrument profits, analysts who follow the company praised the new emphasis as a potential revenue blockbuster based on established technology.

For the cancer indications the company is currently targeting -- head and neck, liver and pancreatic and certain skin tumors -- the potential market size is on the order of $500 million per year in the U.S. and Western Europe alone, according analyst Giuseppe P. Zocco, of Index Securities SA, of Geneva.

Brook Riggins, a special situations analyst at Canaccord Capital Corp.'s Vancouver office, said the product plus royalties could generate between $75 million and $100 million as early as 2001, with a 15 to 20 percent North American and European market share in the two broad areas of oncology and dermatology.

Both analysts predict Genetronics will sign a big pharma partner to handle marketing of MedPulser, and at better terms than many fellow biotechnology firms receive.

German scientists first developed electroporation in the late 1970s and early 1980s. Plasma physicist Hofmann, formerly of the Max Planck Institute, and his wife, attorney Eve Morris (now deceased), founded the company as BTX Inc. in 1983.

"We wanted to spend more time together," he said, "and the only way to do that was to start our own company."

In 1991, following the death of Morris, Crandell came aboard, first as a consultant, then as general manager, and soon after as CEO and president. Under her tenure, sales of instruments tripled and the company became solidly profitable, but she also urged executives and board members to consider going clinical with an internal therapeutic development program.

The company changed its name to Genetronics in 1994 went public in 1995 -- the same year Hofmann and Crandell married--with an IPO that grossed C$3.6 million at a price of C$1.25 per share. *