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UPenn Spin-Out VGX Licenses DNA Vaccine Tech From School in 'Ongoing Relationship'

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VGX Pharmaceuticals has licensed from the University of Pennsylvania a number of DNA plasmids and constructs in an effort to better compete in the “burgeoning” DNA-based vaccine and therapy field, a VGX executive said last week.
 
The agreement, announced last week, is the latest in a number of licensing and sponsored research pacts between VGX and UPenn since the company spun out of the school in 2000, and underscores how long-term relationships between universities and spin-outs can benefit both parties.
 
However, spin-out companies must not rely too heavily on their parent university and should instead branch out and form relationships with other schools, non-profit institutions, and companies in order to succeed, according to the executive.
 
David Weiner, a professor of pathology and laboratory medicine at UPenn, and Joseph Kim, current president and CEO of VGX, launched the company in 2000 after amassing more than 20 patents covering technology related to viral proteins and drugs for viral infections, cancer compounds, and cancer targets.
 
Eschewing a cash payment for the intellectual property, UPenn took an undisclosed equity position in VGX, as well as “standard milestones and royalty terms based on the successes of different products that came out of the technology,” said Kim, who is also president and CEO of the company.
 
It is unclear what stake UPenn has in the company. A representative for the school’s Center for Technology Transfer could not provide comment in time for this article.
 
According to the UPenn Center for Technology Transfer website, the university has a strong focus on developing start-up companies based on technology developed in-house, and VGX is one of more than 20 spin-outs listed on the website as opportunities for private equity investors.
 
This approach has not yielded UPenn a significant amount of licensing revenue in relation to its peers, but it has kept the school competitive in terms of sheer volume of licensed technologies.
 
Based on data from the most recent Association of University Technology Managers licensing survey, UPenn spent almost $2 billion on research between 2003 and 2005. It placed fifth overall among 153 colleges and universities, with nine startup companies launched during that period, and ranked 10th in number of licenses executed, with 83. However, the school garnered only $7.5 million in licensing income during the same period, ranking it in the bottom half of all schools surveyed.
 
VGX has dipped into the proverbial UPenn IP well several times, having signed several licensing agreements, sponsored additional research in Weiner’s lab, and conducted pre-clinical and clinical trials with UPenn investigators for its HIV and HCV compounds. In addition, Weiner is chairman of VGX’s scientific advisory board.
 
According to Kim, who also did his graduate work at UPenn, VGX will likely continue to cultivate its relationship with the university based solely on the personal relationships that have developed between company and university employees.
 
“Once you do a license deal, there is no guarantee that there will be any other deals,” Kim said. “So these deals are almost independent events. But it is human nature to tend to work with people that you trust and like. So a critical mass gets built with the comfort level – a lot of our management members have a UPenn or Wharton School [of Management] background, so there is a comfort and trust level.”
 
As in most sponsored research agreements, VGX also gets first dibs on licensing technologies developed in Weiner’s lab that used VGX funding.
 
Loosening Ties
 
Yet despite the “comfort and trust level” afforded by working with other UPenn researchers or alumni, Kim noted that it is important for VGX to develop and nurture ties with other universities, non-profit research institutes, and companies to further develop its drug pipeline.
 
“As a company, you don’t want to get stuck; and as an organization, you don’t want to have narrow tunnel vision with just one organization,” Kim said, “Even though Penn is a great place, with a lot of great science, you don’t want to limit yourself. So there is no real proclivity to dealing with UPenn, other than the fact that there are a lot of great people there, and it’s a good place to work with.”
 
One drawback to dealing with UPenn, for example, is that the amount of technologies with commercial potential can at times overwhelm the school’s Center for Technology Transfer.
 
“There are always issues with large organizations like UPenn in that things sometimes tend to be slower than you want – but that tends to come with the size of the institution,” Kim said.
 

“These deals are almost independent events. But it is human nature to tend to work with people that you trust and like.”

VGX has begun to diversify its IP portfolio by adding technologies that it licensed from other companies, including a DNA-delivery technology licensed last year from Inovio Biomedical; and its VGX-1027 small-molecule anti-inflammatory compound, licensed in early 2006 from Ganial Immunotherapeutics.
 
Kim said the company has also sponsored research at the University of South Florida and Georgetown, with which it also engaged in pre-clinical trials; and VGX will be announcing a sponsored research agreement shortly with the University of Connecticut and another undisclosed university.
 
“We’ve been active both from an industry and academic point of view in terms of licensing needed technologies,” Kim said. “We selectively like to work with very reputable institutions, and we’re always in play for both in-licensing and out-licensing, where we can add value and new things can add value for us.”
 
Closing the Pyramid
 
Under the terms of the latest agreement, VGX will have exclusive worldwide rights to develop a number of DNA plasmids and constructs with the potential for treating or preventing HIV, hepatitis C, human papillomavirus, and influenza infections.
 
The technology, which is protected by several US patents, was developed in Weiner’s laboratory, and comprises consensus sequences and antigens for key HIV, HCV, HPV, and influenza proteins that cover different viral sub-types or taxonomic groups.
 
Kim told BTW that the pertinent intellectual property covers the “second generation” of DNA vaccine technology developed by Weiner. The so-called “first-generation” technology was licensed to Wyeth, Kim said.
 
Kim also said that the UPenn agreement completes the third point of a triangle the company has been assembling to enter the DNA vaccine and therapy market. VGX attained the first two points in February when it merged with Advisys, a privately held Houston-based biotechnology company.
 
“That acquisition brought us a couple of important components,” Kim said. “One is GMP manufacturing of DNA, so we can manufacture our own products or bring in revenues by utilizing our excess capacity by doing contracts for others. The second is a proprietary DNA-delivery device.”
 
The UPenn license gives VGX the third component – “the actual plasmids of vaccines or therapies of interest,” Kim said. “This license shores up our additional content. This new generation – what are called consensus sequences – are synthetic DNA vaccines that are optimized to perform in humans. We feel that having this in house allows us to be a complete player in the DNA vaccine and therapy area.”

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