Gensia spin-off targets gene transfer therapy.

Genisa spin-off targets gene transfer therapy By RICK DOWER 

Gensia Pharmaceuticals has spun off a new company to develop a noval approach known as gene transfer therapy for treating disease.

The spin-off, named Viagene, temporarily will share Gensia's Sorrento Valley office and laboratory space until it moves into its own quarters, according to Gensia President David F. Hale. Hale, the former chief executive of Hybritech Inc., will serve as Viagene's interim chief while a search for a permanent president is under way.

The new company -- whose original name, Retrogene, was recently abandoned by company officials -- is funded with an initial $1 million in seed money from four venture capital firms: Domain Partners of Princeton, N.J., Biotechnology Investments Ltd. of London, and Fairfield Venture Partners and 3i Ventures, both based in Orange County.

Those groups represents four of Gensia's five largest investors, who have pumped nearly $15 million into the parent company. Hale said Gensia also will maintain a substantial equity stake in the new company.

In simplified terms, gene-transfer or gene-delivery therapy involves still-evolving technology to insert genetically engineered material into targeted cells of a patient suffering from a particular disease. Once placed within the target cells, the inserted gene or genes would direct the body's own immune system mechanisms to produce antibodies and destroy the disease cells.

Hale said the therapy holds promise as a powerful, less-virulent way to treat a variety of deadly viral- and genetic-based human ailments, including certain cancers, immune system disorders and congential disease, for which relatively few non-virulent drugs have been developed. He said few other commercial companies have entered the gene-delivery field yet, so Hale said it was decided to start a new company to commercialize gene transfer rather than keep it within Gensia because of the sharply divergent technologies. Gensia is specializing in cardivascular and cerebrovascular drug research.

"I personally believe strongly that if you're going to be successful as a start-up, especially in the biotechnology industry, you've got to focus your small amount of resources," said Hale, who took the helm of Gensia in May. "We decided this was the only way we could take advantage of the potential of both companies."

Hale compared Viagene's position to that of Hybritech, which over the past decade pioneered commercialization of monoclonal antibodies, now widely used in biopharmaceuticals. "We're at that same point of time in gene therapy, right at the forefront of commercializing a new technology," he said.

Hale said because few other companies have surfaced to commercialize gene delivery, Viagene has an excellent chance to nail down proprietary and defensible rights to some of the technology. Viagene's early work likely will include research into a possible treatment for Acquired Immune Deficiency Syndrome. "It's still very early to determine what sort of viral diseases we're ultimately going to target," said Viagene vice president Brad Gordon, former president of Access Partners, a local venture management firm. "No doubt the cards are going to be shuffled several times over the next few years."

Gene transfer has been available for several years and has received growing media attention as a possible future "magic bullet" for treating serious diseases. The technique Viagene will use is based primarily on research into retroviruses -- a small family of viruses that transcribe genetic information in reverse order -- conducted by a group of UCSD scientists, including Gensia founder Dr. Harry E. Gruber and Paul K. Laikind.

"These fellows have some clever ideas, some proprietary ideas, and we want to be part of their support," explained Dick Schneider, a partner with 3i Ventures of Newport Beach. "Other people have started to recognize the importance of this new technology and (Viagene) has a very unique handle on it."

Gruber and Laikind founded Gensia in 1986 with $4.8 million in venture funding to pursue commercialization of therapeutics based on purines and pyrimidines, chemicals found within human cells that regulate biological activities such as energy production and transfer.

The research Gensia is pursuing has apparent potential in development of drugs to treat cardivascular, neurological and cerebrovascular disease. The company's purine researchg may also hold promise in developing, asthma and infectious human diseases.

Although Gensia has no products available yet, officials are hopeful of beginning human clinical trails sometime next year on its first drugs.

Gensia has rapidly expanded operations this year, hiring a number of key executives, moving into new office and lab space in Sorrento Valley and setting up a European subsidiary based in London. Last week, the company announced it had completed a $9.7 million round of venture financing and expects to sign another $1.3 million within a few weeks.

Hale said the money would be used primarily for continued research and setup of the European operation, which will enable Gensia to submit new products for approval simultaneously in both the U.S. and Europe. Officials hope the arrangement will enable Gensia to begin selling abroad more quickly, as European countries have a generally shorter approval period than the U.S. The company has said it plans to pursue a similar deal in Japan.

Gruber and Laikind scored a major coup earlier this year when they hired Hale away. At Hybritech, Hale helped develop the company into what many consider the biggest San Diego biotechnology success story so far. Hybritech was sold to Eli Lilly & Co. in 1986 in a deal worth nearly half of a billion dollars.

Hale, one of the dominant figurtes on the local biotech scene for the past several years and a founder of UCSD's pioneering Program in Technology and Entrepreneurship, said at the time he left Hybritech for the challenge of overseeing a start-up biotechnology company.

Photo: David F. Hale