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Viral Genetics Unit to Market University of Colorado Researcher's Cancer Rx Platform

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By Ben Butkus

Biotech firm Viral Genetics said this month that it has formed a subsidiary called MetaCytoLytics to commercialize cancer therapies based on metabolic disruption technology developed at the University of Colorado and the University of Vermont.

Viral Genetics formed the subsidiary to focus solely on the metabolic disruption technology while it continues to develop therapies to treat infectious disease and immune disorders using a thymus nuclear protein compound, for which Viral Genetics also has licensed IP from CU.

"These are two different technologies from the same inventor," Haig Keledjian, CEO of Viral Genetics, told BTW this week, referring to Karen Newell, a professor of biology at CU-Colorado Springs.

"We don't have the resources to develop both, and we thought it would be better to have another person and subsidiary dedicated to the [metabolic disruption] technology," Keledjian said.

That person will be Richard Trauger, former senior director for infectious diseases and cancer at Hollis Eden Pharmaceuticals, who will serve as CEO of MetaCytoLytics.

Viral Genetics said that Trauger will be charged with developing cancer drug candidates based on the metabolic disruption technology and moving them into clinical trials, as well as expanding the indications for the platform.

Upon completion of certain undisclosed benchmarks, Trauger will have an opportunity to acquire a 25 percent stake in MetaCytoLytics, Viral Genetics said.

The metabolic disruption technology describes a method of blocking a tumor cell's ability to generate energy from glucose or fatty acids. In animal studies, Newell has shown that the process directly causes cancer cells to die, and that the treatment can be used in conjunction with other cancer therapies such as chemotherapy and radiation therapy to further limit tumor cell growth.

Viral Genetics, based in San Marino, Calif., has an option to acquire exclusive rights to the metabolic disruption technology from the CU system, which handles tech transfer for its Colorado Springs, Boulder, and Denver campuses. The company is currently negotiating to convert the option into an exclusive worldwide license covering a broad range of uses and specific therapeutic compositions.

In May, prior to forming MetaCytoLytics, Viral Genetics said that CU had been awarded a US patent covering Newell's work and that the company had optioned the IP (see BTW, 5/27/2009)

At the time, the company said that the patent represented a new direction for its therapeutic pipeline and for an ongoing collaborative research with Newell's laboratory at CU.

Viral Genetics is also negotiating to convert an option into a license for related IP from the University of Vermont, where Newell had worked prior to joining CUCS. "The metabolic disruption technology has been following [Newell] and her work, and there are some related patents owned by the University of Vermont," Keledjian said.

Viral Genetics has been working with Newell's since before 2007, when it formed a subsidiary called V-Clip Pharmaceuticals specifically to license another technology from the lab related to using thymus nuclear protein compound for diagnosing and treating a variety of diseases. At the time, CU, Newell, and other researchers took an equity stake in V-Clip.

In December 2007 V-Clip licensed several patent applications and know-how related to the TNP mechanism of action and its use for diagnosing and treating HIV-AIDS, hepatitis C, and herpes (see BTW, 12/31/2007).

Then, in June 2008 V-Clip expanded the agreement to include a pair of exclusive options to acquire rights for treating and detecting several forms of cancer, including lung, breast, leukemia, and others; as well as multiple sclerosis, diabetes, rheumatoid arthritis, malaria, and several other diseases (see BTW, 6/18/2007).

Viral Genetics essentially used V-Clip as a "testing" period with CU, and eventually bought a majority stake in V-Clip to bring the TNP technology in-house. It is now Viral Genetics' primary therapeutic-development platform.

Viral Genetics also said that, in a bid to "strengthen its place in the marketplace," it has recently filed an unaudited financial statement with Pink Sheets covering its financials for the 18 months ended March 31.

According to the statement, Viral Genetics reduced its net loss to just under $500,000 for the three months ended March 31 compared with a net loss of $1.5 million for the same period in 2008.

The company said that it also retired a significant portion of its debt, enabling the majority of any new funding to go directly toward drug development.

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