Neocrin Co. and CytoTherapeutics Inc. (CTI) announcedThursday that they have agreed to merge their respectiveresearch programs on developing biotherapeutic implants fortreating diabetes. In exchange for an equity position, CTI istransferring the assets and intellectual property of its diabetesprogram to Neocrin.
The combined diabetes effort--which is focused on developinga bio-artificial, implantable pancreas for treating type Idiabetes--will be conducted under the aegis of Neocrin,explained Greg Dane, Neocrin's president and chief operatingofficer.
Consummation of the transaction awaits the completion of duediligence by both parties and negotiation of definitiveagreements.
Privately held Neocrin, based in Irvine, Calif., was formed in1992 as a partnership between Baxter Healthcare Corp.(NYSE:BAX) and TranCel Corp. Part of that partnership,explained Dane, is a distribution agreement under which Baxterhas the worldwide non-exclusive rights to distribute anyresulting products for the first two years. After that, "Neocrin isfree to establish other partnerships or to market and distributethe product itself," Dane told BioWorld.
Baxter will remain a major shareholder in Neocrin.
The merger also gives CytoTherapeutics (NASDAQ:CTII) achance to "participate in the value" of its own encapsulatedislet technology without putting more resources intodeveloping the technology per se.
"Our strategy was to maximize the value for our diabetesproject," explained Thomas Wiggans, CTI's president and chiefoperating officer. "The combination of Neocrin's very goodtechnology with Baxter's technology and downstreammarketing expertise created a very significant partner," headded.
CTI of Providence, R.I., can now "...focus all its internalresources on developing cell and gene therapies for centralnervous system (CNS) disorders," commented Wiggans. "We'vehad recent successes in our CNS programs and see tremendousopportunities to move them forward," he told BioWorld.
Both CTI and Neocrin have been developing biocompatible,implantable devices for delivering insulin to patients with typeI diabetes. The two firms' programs "are synergistic in severalareas of the technology required to make this therapy areality," said Neocrin's Dane. He explained that "the bio-artificial pancreas program is a complex program requiringexpertise in cell biology, immunology, microencapsulationtechnology, membrane biomaterial and sophisticated devicedesign."
Neocrin's bio-artificial pancreas, which is being designed as animplantable device, contains purified clusters of porcinepancreatic islet cells capable of secreting insulin and otherhormones. The device consists of several hundred thousandislets covered with polymeric capsules which are then enclosedin a larger, single unit membrane device.
CTI, on the other hand, had been using human pancreatic islets(isolated from cadavers) encapsulated in polymer membranesthat are designed to enable the flow-through of nutrients andoxygen while protecting the cells from attack by the patient'simmune system.
In fact, the company reported in mid-August that it hadinitiated the first clinical trial of its encapsulated islets underan investigator-sponsored investigational new drug (IND)application.
But the membranes the two companies have used vary. CTIwas placing isolated islets, in an alginate matrix, inside hollowfibers, Dane said. But Neocrin had been using Baxter'smembrane technology. "Baxter's membranes consist of an outerneovascularizing membrane bonded to an innerimmunoprotective membrane," Dane added. Between the two,however, "we expect complementarity...The physical andchemical aspects of the membranes are important. The issue isto ensure that there is sufficient nutrition to keep the[encapsulated] cells alive while simultaneously protecting them[from attack by the host's immune system]," said Dane.
Ultimately, Neocrin hopes to create a bio-artificialJpancreasthat can be implanted subcutaneously and remain at the site ofimplantation for about five years. The islets will most likelyneed to be replaced, maybe as often as every six months, butideally that would be done on an outpatient basis, Dane toldBioWorld.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.