Xenogen, an Alameda, Calif.-based biotech specializing in small-animal in vivo imaging assays, last week won a US patent granting it protection for screening assays — both in live cells and small animals — for angiogenesis-modulating compounds.
The patent, US No. 6,867,348, entitled “Methods and compositions for screening for angiogenesis-modulating compounds,” gives Xenogen protection for a broad range of screening assays against the mouse VEGFR-2 receptor — one of a group of the most sought-after targets for modulating angiogenesis in the current cancer drug-discovery landscape.
What’s more, the patent provides Xenogen — which is more of a reagent and imaging tool provider than a screening service provider — protection for genetic constructs and associated recombinant cells that express variations of the VEGFR-2 receptor.
Specifically, the patent protects “novel promoters, including transcription regulator regions, for the mouse VEGFR-2 receptor; isolated polynucleotides comprising such promoters; and nucleic acid constructs comprising such promoters operatively linked to genes encoding a gene product,” the patent’s abstract states.
Examples of gene products to which the constructs can be operatively linked include “a reporter, a protein, polypeptide, hormone, ribozyme, or antisense RNA,” the abstract states. Furthermore, the patent protects “recombinant cells comprising the nucleic acid constructs, screening for therapeutic drug using such cells, and endothelial tissue-specific gene expression using the … promoter sequences,” the abstract states.
Pamela Contag, Xenogen’s president, last week told Inside Bioassays that although the patent has a cell-based assay slant to it, it fits nicely with the company’s ongoing strategy to provide instruments and assays on both an in vitro and in vivo level for a systems biology approach to drug discovery.
‘We have a very specific perspective on in vitro cell-based assays and animal assays,” Contag said. “We think both are extremely important. I started out in drug discovery and development, and one of the issues that we had was that you would create a very nice cell-based screen, and you’d run your compounds through that and you’d select a hit.
“But then you’d take that hit, and put it in the next animal model you were thinking of, and of course you’d get very different results,” she added. “The question is ‘Why does that happen?’”
It’s a question that Xenogen has been asking since its inception nearly two decades ago, Contag said, and it has based its business model on the fact that researchers at pharmaceutical companies are asking it, too.
Xenogen sells a mix of what Contag calls “full-fledged” imaging systems (the IVIS series, standing for “in vivo imaging systems”) capable of conducting fluorescent or bioluminescent assays primarily on mice, but in some cases on cell culture plates, well plates, or gels.
Xenogen also creates specialized recombinant cell lines and small-animal models for drug-screening assays or basic research. It sells these products sometimes in combination with its imaging systems, and sometimes alone.
“We sell the instrument, and we sell the biology; we do some contract research, and we do animal production,” Contag said. “So we create the cell lines and animal models for people. And then they can do all of it in house; or, in many cases we do a lot of the animal production and the phenotyping, and then sometimes we do services. But in general, people license the technology and use it in house.
The significance of the recent patent, according to Contag, is the broad protection it provides for a highly sought-after target in anti-angiogenesis, and thus anti-cancer drug research. VEGFR-2 also has strong implications in eye disease, inflammatory disease, and cardiovascular disease, among others.
“We started noticing in the past couple of years that about 60 percent of our customers are interested in oncology,” Contag said. “So we’ve started looking at these validated targets that play a role essentially across therapeutic areas. And one of those genes that we hit upon, or now understand as being very valuable — both in normal function and in uncontrolled development of tumors and blood cell proliferation — is this VEGF regulator, and the corresponding VEGFR-2 receptor.
“So we created this set of cells in which this promoter drove a reporter, and in addition in which this cassette could [drive a reporter] in our live animal model; and we’ve used that to test various aspects of angiogenesis in both biology and for drug screening,” she added. “We love the idea that these cell-based assays that people do can be essentially converted into animal models.”
In addition, the patent gives Xenogen another potential revenue-generator on the reagent and biology side of things, as to this point, Contag said, the majority of the company’s revenues do come from instrument sales.
“As an instrument and reagent company, you start selling the instruments, and then the reagents start to ramp up afterwards,” Contag said.
Another step Xenogen has taken to expand the distribution of its cell lines and animal models is an ongoing agreement, established in 2003, with Charles River Laboratories, in which Charles River markets the genomic services of Xenogen’s NJ-based subsidiary, Xenogen Biosciences, to the clients of its transgenic services business.
So far, Xenogen’s strategy seems to be paying off, as it posted record revenues of $30.9 million for its 2004 fiscal year, up 54 percent from the $20.1 million it recorded in 2003. The primary driver of that revenue growth, according to the company, was the IVIS imaging systems, of which it sold 83 in 2004, nearly double what it sold in 2003.
And slowly, the company is inching its way out of the red. It posted a net loss in the fourth quarter of $5 million, compared to a $9.1 million for the same quarter in 2003; and a net loss for all of 2004 of $21.8 million, compared to $26.5 million in 2003.
Furthermore, Xenogen announced in January a broad bolstering of its IP estate with the receipt of five US patents covering most of its biophotonic imaging methods.
“We have a lot of reagent patents out there,” Contag said. “But our broad patent is for the method of imaging whole animals, and we have patents on the hardware and the software, and on all different aspects of the biology.”