Viragen drops transgenics project

By Anna Lewcock

- Last updated on GMT

Related tags: Oxford biomedica, Interferon

Despite the popularity of transgenics and the potential it is seen
to hold for the future of biopharmaceutical production, Viragen has
decided to drop development of its OVA system - therapeutic protein
production in transgenic hen eggs.

The company had licensed Oxford BioMedica's LentiVector gene delivery technology and was also collaborating with Scotland's Roslin Institute to develop its avian transgenics technology for the manufacture of therapeutic proteins in egg whites. The project has now been halted, with Viragen citing the fact that "the distance between research and commercialisation is simply too great"​ and the company's resources are "better focused on advancing our anti-cancer therapeutics." ​ Viragen kicked off its collaboration with Oxford BioMedica in 2004, and had made several breakthroughs this year: breeding five generations of transgenic hens, and successfully expressing high levels of interferon alpha-2a as well as interferon beta-1a and a humanised monoclonal antibody (miR24). However, despite the promising results, the project has been shelved as financial returns are seen as too distant. Warning signs could be seen in the company's annual report earlier this year, which highlighted the fact that despite considerable industry and public interest in the OVA system, realistic licensing opportunities would require a great deal more work, "significant additional funding and a number of years of work by [the] avian transgenics team,"​ - resources the company does not feel in a position to provide. Viragen has been slimming down its projects of late, in May also having ended a collaboration with Memorial Sloan-Kettering Cancer Centre for the development of a humanised antibody for the treatment of Stage IV malignant melanoma. By the time the company decided to pull out of the project, it invested around $1.5m (€1.1m) in the venture. The company also recently learnt that it is to be delisted from the American Stock Exchange (AMEX) due to losses from continuing operations over the past five years and low stockholder equity. The company would not confirm whether these latest moves were prompted by the delisting or would form part of the firm's appeal to Amex. As for Oxford BioMedica who licensed the technology to Viragen and received annual maintenance payments from the company, the end of the project is no great upheaval, particularly since the company recently landed a deal with Sanofi-Aventis for its TroVax cancer treatment, potentially worth over €500m. "The project was always an interesting sideline for Oxford BioMedica,"​ Andrew Wood, the company's chief financial officer said of the transgenics programme to "We knew from the start that the protein production would be possible, but we were sceptical about commercial possibilities." ​ If Viragen had successfully managed to commercialise products based on Oxford BioMedica's technology, the company would have received generous royalties according to Wood, but as the firm was only receiving a small annual sum from Viragen, the end of the collaboration is less of a problem. As the company is now relatively financial secure following the Sanofi deal, along with partnerships with significant pharma players such as Wyeth and Sigma-Aldrich among others, the loss of the Viragen project "will make no material difference​" to Oxford BioMedica's finances according to Wood. The company is not planning to follow up with independent development of the transgenic programme as it represented an interesting but only minor project for the firm. It will however, be seeking out other companies who may be interested in continuing the project and applying the LentiVector technology for the development of therapeutic proteins in transgenic animals. Viragen will be refocusing its efforts on developing its anti-cancer portfolio, including Multiferon (multi-subtype, human alpha interferon) and two pre-clinical anti-cancer candidates.

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