Competitors of Systemix Inc., whose recent patent approval forpurified stem cells from bone marrow caused the company'sstock price to jump more than $20, said the patent will notaffect their efforts to develop competing products for cancerpatients.

In addition to Systemix (NASADAQ:STMX) of Palo Alto, Calif.,Applied Immune Sciences Inc. (NASDAQ:ASIX) of Menlo Park,Calif., and CellPro Inc. (NASDAQ:CPRO) of Bothell, Wash., are alsodeveloping technology for reconstituting a patient's blood cellpopulation through the reinfusion of the patient's stem cellsafter they have been purified in minute amounts from bonemarrow.

Announcement of the patent on Oct. 31 prompted feveredtrading in Systemix stock, pushing it from $34.50 to as high as$55 on Nov. 7. It closed at $48.75, up 25 cents on Monday. AIShas risen slightly from $23.50 during the same period, closingMonday at $26.75. CellPro has fallen back from $17.50, closingat $16 Monday.

Stem cells, which constitute 1 percent or less of bone marrowcells, are the progenitor of all other blood cell types. Reinfusionof stem cells reduces the potential for reinstituting hiddencancer cells through bone marrow transplants. Transplantedstem cells also would not contain T cells that would makedonor-derived bone marrow prompt a rejection in therecipient.

Systemix estimates that 6,000 bone marrow transplants areperformed each year in the United States, with a growth rate of40 percent annually.

The Systemix patent, NO. 5,061,620, covers a differentpurification process and final composition of matter than thetechnology being developed by CellPro or AIS. The Systemixapproach is a multistep screening process that removes all but1 percent or less of bone marrow blood cells, whereas CellProand AIS use a one-step process that removes all but 2 percentto 10 percent of cellular material.

"The Systemix patent does not in any way affect what we aredoing," said Christopher Porter, CellPro president and chiefexecutive officer.

"We don't believe we are in conflict at all with the patent," saidJim Smith, senior vice president of AIS.

Systemix and AIS are conducting the equivalent of preclinicaltrials, while CellPro is conducting the equivalent of Phase I/IItrials. "We have performed many stem cell transplants onpatients with advanced cancer in clinicals," Porter toldBioWorld. "We are the only group at this time that has recordedevidence that we can use antibodies to purify stem cells fortransplant."

"Systemix has probably achieved the most elegant separationof the stem cell that has been accomplished in humans, but it isnot something that is clinically practical," said Ron Berenson,CellPro's vice president of biological research and medicalaffairs and the inventor of CellPro's technology. Systemix hasnot shown that its technique can be scaled up from infusions inmice to reinfusions in humans, he said.

In response, Systemix spokesman Fred Spar said the companyis "on schedule." Systemix has just begun a pilot study with sixpatients whose stem cells are being placed in mice, and withinsix to 12 months will begin a second phase of the study inwhich purified stem cells are reinfused into the humanpatients, he said.

Smith would not comment further on Applied's developmentplans, but said, "We will have some interesting developmentsin the next three months."

The CellPro and AIS technologies are more practical and mayprove sufficiently pure for reinfusion in bone marrow cancerpatients, Berenson said. "The Systemix patent will bemeaningful only if somebody else wants to use a purifiedpopulation of stem cells. If no one else makes a population thatis pure enough to infringe on the patent, it doesn't meananything."

However, Merrill Lynch analyst Stuart Weisbrod said theSystemix patent covers the range of cells that aretherapeutically effective. It "is a very important patent,"Weisbrod told BioWorld. "Anybody else who wants to developpure stem cells will have to take a license from Systemix ifthey want to market."

Weisbrod rates Systemix an "average performer" in the nearterm, which will maintain its stock price near current levels,and calls it a "buy" for the long term. He said he expectsSystemix stem cell technology to reach the market by 1994.

Both Weisbrod and analyst David Stone of Cowen & Co. said thegranting of Systemix's patent should not have surprisedinvestors because the pending patent was prominentlyannounced in the company's initial public offering prospectusin August.

"Wall Street has been persuaded that patents are important,but that doesn't mean that they understand how to analyzethem," Stone said. "Whether this has clinical relevance remainsunanswered."

In the long run, said Systemix's Spar, stem cell technologycould be used to develop genetic therapies that correct certaingenetic blood disorders or to confer immunity to certaindiseases such as HIV.

"Genetic therapy would be greatly aided by having this muchmore purified population of stem cells," CellPro's Berenson said."But these applications are not what most people consider to bethe most commercial aspect of this therapy at this stage."

-- Kris Herbst BioWorld Washington Bureau

(c) 1997 American Health Consultants. All rights reserved.