Intrexon buys majority stake in RheoGene

Merger creates a biotech firm targeting gene-based therapies

Lloyd Dunlap
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BLACKSBURG, Va.—Biotechnologycompany Intrexon Corp. and Norristown, Pa.-based RheoGene, Inc., a gene andcell therapy company recently announced plans to merge. The combined companywill be named Intrexon Corp. and be headquartered in Blacksburgwith supporting facilities in Norristown. The Universityof Pittsburgh Medical Center (UPMC), which acquired RheoGene in 2003, willretain a significant ownership stake and a seat on the board of the mergedcompany. Financial terms were not disclosed by the privately held companies.
"Intrexon's and RheoGene's technologies are verycomplementary," says Intrexon CEO Robert Beech. "The safest and most effectivegene-based therapies will require highly optimized gene programs that can betightly regulated as to their on/off state, levels of expression and genomicpositioning."
The combination of Intrexon and RheoGene creates an advancedresearch and development biotechnology enterprise whose goal is to establish aleading position in gene-based therapeutics.
"Our modular UltraVector system enables rapid combinatorialoptimization of complex gene programs. The RheoGene technologies deliver tightgene regulation and controlled genomic positioning. The integration of thosecomplementary capabilities, across the R&D spectrum from discovery to theclinic, will enable significant advances in gene-based medicine," Beech adds.
"This is an exciting opportunity for RheoGene," says its CEOTom Tillett. "The merger will significantly enhance our therapeutic technologyand research capabilities as well as provide the resources to accelerate ourtherapeutic products for cancer and central nervous system disorders into theclinic.
"RheoGene very much appreciates the support we have receivedfrom UPMC over the past three-plus years, which has been instrumental in therefinement of our technologies and launching our first set of therapeuticprograms. The merger with Intrexon will position those therapeutic programs inthe context of a fully integrated gene-based R&D company with access tosubstantial private capital."
Intrexon, as its name implies, focuses on transcriptionaltherapeutics which use both intron and extron parts of exogenous DNA, Breechexplains. These are inserted within the cell where they interact with proteinsand RNA. The recombinant or fusion proteins localize to a specific, targetedsubcellular area. A second part of the Intrexon technology involves decoys thatreplace the natural partner by binding on one part of the protein to reduceinteraction. This technology can be applied to kinase interactions with asubstrate target, for example, on a variety of different proteins.
RheoGene technology, as itsname implies, modulates the on-off status of genes in the transcriptional stateto control their level of expression. The suburban Philadelphia-based companyspecializes in gene-regulation systems designed to deliver precise geneticcontrol for new medical applications including cellular and gene therapies,genomics and enhanced protein expression. RheoGene's proprietary system uses apatented small-molecule mediator that can turn genes "on" or "off" as well asadjust the level of gene activity.
In 2005, RheoGene was awarded more than $4 million from theMichael J. Fox Foundation for Parkinson's Research to refine itsgene-regulation technology for use with key proteins and growth factors thoughtto protect critical neuron function and survival. RheoGene also is using itspatented technologies to explore possible treatments for melanoma.
Intrexon relocated its operations to Blacksburg, Va. from Cincinnatiin 2004. The company notes that it has received significant funding from NewVaCapital Partners, an investment partnership founded by the Virginia TechFoundation, Carilion Health System and Third Security, LLC.
The management team of Intrexon will be headed by Beech as CEOand Tillett as COO, and will include additional executives from both companies.All RheoGene employees will be offered positions with Intrexon. The merger is subject to approval by the companies'shareholders, as well as regulatory agencies and customary closing conditions.The merger is expected to close in the first quarter of 2007
 

Lloyd Dunlap

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