Stem cell patent purchase 'clear path to market': BresaGen

Adelaide biotechnology company BresaGen has fitted the keystone into the archway of its ambition to be a substantial player in embryonic stem cell (ES cell) therapy, by acquiring valuable patents on the methodology for isolating pluripotent stem cells.

BresaGen announced today it has completed a deal with Plurion, based in Atlanta, Georgia, to purchase the so-called Hogan patents -- some of the earliest patents describing methods for isolating pluripotent stem cells.

BresaGen has previously exploited the Hogan techniques to isolate the four embryonic stem cell lines the company has been using for its research into ES cell therapy for neurodegenerative disorders of the brain.

In an announcement today, BresaGen said the acquisition could "dramatically open up the market for stem-cell based therapies".

Embryonic stem cells, the fast-dividing cells that develop from the fertilised egg, or blastocyst, have enormous potential for treating genetic or degenerative disorders, because they can be induced to develop into any of the different cell types that make up the human body.

BresaGen president and CEO Dr John Smeaton said his company now had "a clear path to market" for its treatments for Parkinson's disease and other disorders of the central nervous system.

BresaGen has been developing techniques that cause ES cells to differentiate into the specific types of neurons needed to replace lost and damaged brain cells in patients with Parkinson's or Alzheimer's disease, as well as the technologies required to deliver the cells into the central nervous system -- the brain or spinal cord.

The four ES cell lines BresaGen has developed qualified the company for a grant from the US National Institutes of Health to make them available to approved researchers.

But as Smeaton today told Australian Biotechnology News, while the four BresaGen cell lines were adequate for experimentation, the future use of ES cells in most human therapeutic applications will depend on the availability of a wide range of ES cell types for matching to the genetic profiles of recipients, to prevent the cells being rejected.

BresaGen is focusing on ES cell therapies for neurodegenerative disorders because the brain and spinal cord are immunologically 'privileged' -- because they are not subject to immune surveillance, 'non-self' cells are not rejected.

Smeaton says BresaGen is actively pursuing research agreements with several major pharmaceutical companies, and expects to finalise agreements in the near future.

The company said it planned to make its cells -- and technologies -- widely available for commercial and academic research.

"We're not going to be able to address all the applications ourselves, not by a long shot," Smeaton said. "We'll share with others who have received NIH approval, so we can generate some early licensing income across the field.

"We like the business model for the early gene-splicing patents of Cowen and Boyer in the 1970s -- they didn't try to dominate the market, and licensed the technology to other researchers and companies for a nominal fee.

"By doing so, they allowed the technology to spread very rapidly.

"We would like to make our IP available for the overall benefit of the stem cell field and the advancement of humankind."

The Hogan patents, issued between 1992 and 1995, have the earliest priority dates for any patents related to production of human pluripotent stem cells. Smeaton said BresaGen was now "very confident" of its legal position.

Powerful tool

Vanderbilt University in Tennessee granted Plurion exclusive rights to the Hogan Patents in the early 1990s, before the US Patent Office decided in 1997 to remove a provision that allowed patent holders to add extra information relevant to the original patent.

The clause effectively allows holders of pre-1997 patents granted in the US to update their patents to accommodate recent developments, rather than file new ones. It has become known as the "submarine clause" because it can surface without warning to torpedo potential rivals.

Dr Smeaton described the provision as a "pretty powerful tool".

"Outside the US, the patent position is much more open, but we believe the early priority date is key -- it justifies our investment in the area, because we need to be in a position to address the world market," he said.

In its deal with Plurion, BresaGen has agreed to purchase rights to the Hogan Patents, including exclusively licensed rights from Vanderbilt University in Tennessee for isolating pluripotent stem cells.

In exchange for these rights BresaGen will issue Plurion 18,682,398 shares and 5,685,947 options exercisable at $0.41.

Late today, BresaGen clarified its earlier announcement by saying that the deal with Plurion was based on Plurion taking a 30 per cent shareholding in BresaGen, rather than being on a price-per-share basis.

BresaGen will appoint two Plurion directors to its board -- David Perryman, an experienced patent attorney, and Mark Germain, managing director of a US merchant bank serving the biotechnology and life science industries. Germain will become a consultant to BresaGen to assist with fund-raising and other corporate activities.

The acquisition is subject to shareholder approval by both companies, due diligence, and signing of formal documentation. BresaGen shareholders will vote on the deal at a general meeting in Adelaide next February.