Two emerging biotechnology companies, IncytePharmaceuticals Inc. and Celtrix Pharmaceuticals Inc.,announced details of agreements with Genentech Inc. onThursday.
Privately held Incyte of Palo Alto, Calif., has gained exclusiverights to Genentech technology related to a protein beingexplored for its potential effects against shock-causingendotoxin, bactericidal/permeability increasing protein (BPI).
Incyte holds two patents and several pending applicationscovering the composition and use of BPI and related molecules,but Genentech has worked on the molecule since 1985 and mayalso develop something patentable on BPI, said Roy Whitfield,Incyte's president.
Under a 1991 agreement, Genentech licensed Incyte'stechnology for clinical development in return for exclusivemarketing rights in the U.S. and Europe. The South SanFrancisco, Calif., company (NYSE:GNE) also gave Incyte theoption of resuming control over the pace of clinicaldevelopment.
Since proposed septic shock treatments developed by SynergenInc. and Centocor Inc. have suffered setbacks in recent weeks,Incyte chose to hasten development of BPI to focus onimproved commercial prospects.
Under the revised agreement, Genentech will raise its 10percent equity stake in Incyte during Incyte's next round offinancing to an undisclosed amount and will receive a royaltyon BPI product sales where Genentech BPI technology ispatentable.
Celtrix (NASDAQ:CTRX) has entered a cross-licensing patentagreement with Genentech with the possibility of futurecollaboration.
As a result of this agreement, Genentech will receive $4 millionin stock, or about a 7 percent stake, in the Santa Clara, Calif.,company, which has 8.3 million fully diluted shares. Inexchange for a $4 million license fee and future productroyalties, Celtrix will have access to Genentech's patentedprocesses for producing recombinant compounds in bacteria.
That will allow Celtrix to increase production of its lead productfor systemic use. Celtrix discovered transforming growthfactor-beta-2 (TGF-beta-2) in pulverized cattle bones in 1983and has applied this wound-healing factor to eye disordersover the past two years. The company produces clinical-gradeBetaKine in mammalian cells in its new plant in Santa Clara.
Celtrix is exploring using BetaKine in more eye conditions, skinulcers, osteoporosis and multiple sclerosis (MS).
BetaKine appears to regulate the recovery of paralytic episodesin MS, Dale Stringfellow, Celtrix's president, told BioWorld, andincreases bone density in animals by stimulating boneformation.
Celtrix may also use Genentech's microbial methods to producea soluble TGF-beta cell receptor, and is also working on a thirdregulatory protein, SomatoKine.
Genentech has focused on developing TGF-beta-1, the first inthis class, discovered at the National Institutes of Health in1983.
Celtrix has granted Genentech a right of first discussion to co-develop products in systemic applications, for which Celtrix hasnon-exclusive rights. Celtrix has non-exclusive rights for usesin eye disorders, such as macular holes, an orphan drugindication concerning black spots in the central field of vision,and macular degradation. Celtrix retains exclusive rights forwound healing in skin ulcers, which afflict about 600,000patients in the U.S.
Both Celtrix and Incyte said they can now discuss agreementswith other partners without concern about possible Genentechpatent claims. Two major pharmaceutical companies havealready contacted Incyte about working on BPI, Whitfield said.
Celtrix's stock closed Thursday at $7.25 a share, up 63 cents.Genentech's stock was unchanged at $34.75 a share.
-- Nancy Garcia Associate Editor
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