In a bid to snare a share of the estimated $3 billion pharmaceutical ADME/Tox screening market, Lincoln, RI-based MultiCell Technologies said last week that, XenoTech, the exclusive licensee of its immortalized non-tumorigenic human hepatocytes has signed a three-year deal with Bristol-Myers Squibb that allows BMS to propagate the cells for internal drug screening purposes
Under the terms of the agreement with XenoTech, BMS can now propagate and use MultiCell's immortalized Fa2N-4 hepatocytes for internal testing. BMS is the first major US-based pharma to license the cell lines for drug discovery, MultiCell said. Financial terms of the deal were not disclosed.
It's not the first pharma deal for MultiCell and Xenotech, however. Last week MultiCell President Stephen Chang told CBA News that the BMS deal is similar to one MultiCell signed in October with Japanese drug maker Eisai for the same cell line. At the time, MultiCell said that the deal was a "six-figure contract."
MultiCell's cell lines have also been validated by Pfizer, which helped develop the cells and subsequently "essentially took a non-exclusive license for their internal use," according to Chang. However, Chang said the Pfizer deal was different from those signed with BMS and Eisai.
"We're in the process of transitioning our business plan," Chang added. "Many of our customers have come to us [for propagation], but we just don't have the in-house capacity to do propagation of cells on a consistent basis, so we are looking into re-launching the product as a consumable.
"But these negotiations with companies are already in place, and everybody has the right to do whatever they want," he added. "So the customer in this case, BMS, wanted to have a license to propagate."
BMS was unable to provide comment in time for this publication.
Because of their extreme relevance in ADME/Tox studies, hepatocytes are being used more frequently in the drug-discovery market in the past few years, and the topic has been heavily discussed at several recent cell-based assay and drug-discovery conferences.
MultiCell, which trades on the Nasdaq over-the-counter market, has traditionally been a developer of liver cell-based products for therapeutic use. Among other endeavors, the company is developing a bio-synthetic liver device through its subsidiary Xenogenics, and is producing therapeutic proteins derived from the liver cell lines.
However, the company has recently begun to take advantage of the trend toward cell-based assays, and in particular, hepatocyte usage in drug-discovery.
"This is targeting the ADME/Tox people in drug discovery, which is a pressure point in all drug-discovery programs," Chang said. "A lot of this work is outsourced, but when they get to the point of using proprietary compounds, a lot of the research has been brought in house.
"We own the IP to the human liver cells," he added. "Basically, these cells [constitute] a platform technology for us, and this is our first application for drug discovery. We have a therapeutic protein program, because these cells make a lot of novel liver proteins. But this is basically a shortcut — it doesn't need FDA approval, and it's a direct application and market need."
The XenoTech/MultiCell Alliance
In August 2003, Lenexa, Kan.-based XenoTech and MultiCell signed an exclusive, seven-year manufacturing, distribution, and sales agreement for two of MultiCell's cell lines, including the Fa2N-4.
According to a market research report issue in May from investment research firm Dutton Associates, XenoTech, in order to maintain distribution exclusivity, must bear all the costs for its manufacturing and sales activities and make specified minimum periodic royalty payments to MultiCell that total $18 million over the course of the seven-year agreement.
Furthermore, XenoTech is "to make royalty payments to MultiCell of 17.5 percent of net sales for the direct sale of its cells and 34 percent of net sales derived from any sublicense agreement," the report states.
Dutton initiated coverage of MultiCell with a "speculative buy" rating to the company's stock, based primarily on the establishment of this deal and on its estimates that the ADME/Tox market has a $3 billion potential. Dutton estimates that the total potential market for the hepato-related segments of the ADME/Tox market is $1.2 billion in the long run.
These estimates were based on the assumption that MultiCell would continue to optimize its cell lines for multiple uses in the drug-discovery process. The Dutton report stated that the company's cell lines can currently satisfy the $50 million market for enzyme induction.
Competing with MultiCell is Cambrex subsidiary Cambrex Bioscience Walkersville, which in January purchased immortalized cell-line assets from British biotech Xcellsyz (see CBA News, 1/25/2005). It also recently became a non-exclusive worldwide licensee of Geron's telomerase-based cell immortalization technology for the purpose of developing immortalized cell lines (see CBA News, 1/18/2005).
Another potential rival is start-up biotech Solidus, which is developing a liver-mimicking biochip based on P450 metabolizing enzymes (see CBA News, 3/1/2005). However, this company is still in its early stages and may not pose a competitive challenge to MultiCell in the near term.
For now, it is safe to say that MultiCell/XenoTech and Cambrex are each other's biggest competitors in this area. Despite Cambrex's recent deals for immortalization technology, it still only offers primary human hepatocytes for drug discovery, Mark Powers, a section manager for the Walkersville division, told CBA News last week. David Greenwood, Geron's CFO, last week confirmed that it had not granted Cambrex a license to use the telomerase technology for hepatocytes.
This is not to say, however, that Cambrex will not eventually look to distribute immortalized hepatocyte cell lines in addition to primary cells, Powers said. There are widely debated advantages and disadvantages to using primary hepatocytes versus immortalized hepatic cell lines, and Powers said that Cambrex has been very "selective" in the products that it chooses to bring in and sell.
"Hepatocyte cell lines have been out there for years, and in many ways none of them have been sufficient in doing what people want them to do, which is expressing the full complement of cytochrome P450s at a reasonable level with proper inducibility or inhibition properties," Powers said. "If there were a hepatocyte cell line that came along that had these properties, I think anyone would be interested in them, so I think it's safe to say that we'd be interested in considering those as well."
Cell lines "don't do all the things a human primary cell can do, but they do many of the things, specifically in the area of drug induction," MultiCell's Chang said. "So it allows you [to do] some cell-based assays."
But, Chang added, the variance, cost, and availability of primary hepatocytes reduces their value in high-throughput drug discovery.
"Primary hepatocytes come from various human donors, and if the livers were good enough, they'd be used for transplants," Chang said. "So the companies that get livers that are not transplantable essentially are able to source [and distribute] these cells.
"The quality, however, varies from place to place," he continued. "Remember, these cells have to … not have been infected with hepatitis, and other criteria. A lot of people who die and have available livers had liver failure. It's truly a precious commodity, getting primary human liver cells."
Furthermore, Chang said, studies often revolve around the availability of cells, which have a life span of about three days. "So you have to isolate them, and then use them right away," he said.
"I wouldn't refute that," Cambrex's Powers said. "People want to get cell lines for a reason, and ease of use would be tremendous if they came out. I just have not seen one that I think is good enough to supplant primary human cells. If one existed, I would be the first in line to recommend that we distribute it."
— Ben Butkus ([email protected])