Canada continues stem cell tradition

TORONTO—Building on Canada's legacy of cutting-edge stemcell cancer research, biotechventure-backed Trillium Therapeutics Inc. and publicly held life-sciencecompany Stem Cell Therapeutics Corp. (SCT) have announced a merger to developcancer drugs initially for acute myeloid leukemia (AML) and potentially otherhematological and solid tumors later down the road. The combined company willbe called Stem Cell Therapeutics.

The business deal calls for SCT to pay Trillium'sshareholders $2.85 million, with $1.2 million of the total in cash and $1.65million in common shares.

Trillium comes to the table with two cancer treatments inpreclinical development, plus a clinical-stage drug aimed at interstitialcystitis, a painful bladder disease. SCT brings the knowledge and researchnecessary to develop an already-approved antibiotic called tigecycline into aleukemia therapy.

"The proposed merger of Trillium and SCT would createCanada's only public company advancing cancer stem cell technologies," saysDavid Allan, the executive chairman of SCT. "With a combined pipelinecontaining both TTI-621 and the Tigecycline small-molecule program, which SCTrecently optioned from the University Health Network, the resulting entity willbe well positioned as a global contender in the cancer stem cell field."

The proposed merger—which is expected to be finalized beforethe end of the year—is seen as a bid to create a larger company with a betterchance to raise the capital needed to advance several early-stage cancerdrugs.

"Canada has had a very strong commitment toblood-restorative stem cell therapy, first discovered by (Dr. Ernest)McCullough in the 1960s," says Dr. Niclas Stiernholm, a founder and CEO ofTrillium. "We are building on this legacy in cancer stem cell research."

Stiernholm helped start Trillium in 2002 on venture capitaland licensing revenues. Ever since 2009, "it started to become clear to me thatI could not continue to do research any longer using private revenues, and Isearched for a way to go public," he admits.

"We wanted to refocus away from regenerative stem cellresearch and get into stem cell cancer research," he says. "We are looking toraise from $2.5 million to $5 million to start."

The transaction with Stem Cell will allow the companiescombined assets "to gain access to the capital required for their properdevelopment in order to transform them, over time, into valuable newtreatments," Stiernholm says. "My colleagues and I are excited about theupcoming creation of a much needed commercial vehicle for Canada's world-classcancer stem cell discoveries."

Although a "formidable challenge for a company of any size,by building on the strength of our own capabilities, our existing links toseveral of Ontario's leading cancer research organizations and our globalindustry network, we believe we have a real opportunity to make a difference inthe future treatment of cancer," he adds.

Trillium specializes in immunotherapy and cancer stem cellresearch, with a particular focus on blocking the negative pathways thatmalignant cells exploit to suppress anti-tumor responses. Trillium isdeveloping TTI-621, a novel SIRPaFc fusion protein that targets CD47,augmenting the ability of the immune system to destroy cancer stem cells.

The development of TTI-621 originated from leadingresearchers in the field, including Drs. John Dick and Jean Wang of theUniversity Health Network and Dr. Jayne Danska of the Hospital for SickChildren, all of Toronto. TTI-621, which is expected to enter formalIND-enabling studies in the second quarter of 2013, is being developedinitially as a treatment for AML.

Trillium's preclinical cancer immunotherapy pipeline alsoincludes a fully human CD200-specific monoclonal antibody that is also ready toenter formal IND-enabling studies. In addition to its preclinical portfolio,Trillium is conducting a clinical trial in patients with interstitial cystitis,a chronic and painful bladder disease. Results from this trial are expected in mid-2013.

According to Stiernholm, the intention of the merger isthat all Trillium executives and staff will remain with the resulting entity.Stiernholm will become the CEO of SCT, Robert Uger will serve as chiefscientific officer, Dr. Penka Petrova will serve as vice president of drugdevelopment and James Parsons will serve as chief financial officer.