AGT soars on gene link news

Shares in AGT Biosciences (ASX:AGT) soared more than 72 per cent to close at AUD$0.62 on Monday after a new study showed one of its licensed target genes was strongly linked to the development of insulin resistance.

Data presented by AGT at a genetics meeting in France last week on the PARL gene in humans provide compelling clues about the role it plays in the development of insulin resistance and type 2 diabetes.

The gene is one of several validated target genes for diabetes and obesity licensed by AGT to Merck-Sante for pre-clinical development. Patents filed by the company for the use of the gene in developing therapeutics for diabetes and obesity have reached the international patent examination phase.

While the PARL (presenilin-associated rhomboid-like protein) was not originally discovered by AGT, the company was the first to identify its role in diabetes and obesity, said Dr James Campbell, AGT's director of business development.

Initial indications showed that the gene was over-expressed in skeletal muscle in the Israeli sand rat diabetes and obesity model.

In a population study conducted by the company's Human Genetics program at the International Diabetes Institute in Melbourne and the AGT Centre for Statistical Genomics in Texas comprising more than 1000 individuals, a specific variant of PARL was strongly correlated to the development of type 2 diabetes.

"If you have the variant form, your predisposition to type 2 diabetes is much higher than the normal population," said Campbell. "And the older you get, the more damaging it is to have the variant."

The variant was found in 25 per cent of the population studied, suggesting that it is a recessive form of the gene, Campbell said, and may initially provide a useful predictor of predisposition to the disease. But Campbell and CEO Prof Greg Collier believe the gene is a strong 'druggable' lead for therapeutic drug development.

"Obviously, it is intimately linked to diabetes and the scope to build a therapeutic about it is pretty strong," said Campbell.

Part of the answer to why PARL shows such promise lies in the little which is known about its metabolic role. PARL is a serine protease expressed in the mitochondrial membrane, and a recent paper published in Nature by a group from the University of Cambridge on a PARL homologue in yeast demonstrated that the protein is required for maintenance of mitochondrial function and integrity.

The mitochondrial function of the protein also suggests a role in cancer, muscular disorders and age-related degeneration, leading AGT to file new patent claims for the protein covering these indications in addition to their existing diabetes patents.

According to Campbell, AGT's partner for the development of the PARL gene, Merck-Sante, is delighted by the most recent results. Merck-Sante has already fast-tracked the lead in its pre-clinical development program.

But while Merck-Sante has the rights to develop PARL for diabetes and obesity, it does not have a license to develop the gene for the other conditions patented by AGT, opening up the possibility of new licence deals.

"We're talking to companies other than Merck-Sante for cancer applications," Campbell said. He said that the company was not yet in a position to perform pre-clinical development of therapeutic leads, preferring at the moment to enter into partnerships or joint ventures with other biotechnology companies or pharmaceutical companies.

At press time, AGT was trading at $0.79.