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Executive Summary

Searle's TPA (tissue plasminogen activator) development project with Invitron Corp. is on hold while Searle considers whether to pursue development of variant forms of TPA produced in-house. A preliminary prospectus covering Invitron's initial public stock offering reports that in August Searle and Invitron amended their initial TPA development agreement to cover molecular variant and hybrid forms of TPA created by Searle and parent company Monsanto. "Pending evaluation" of these TPA variants, the prospectus notes, "Searle has reduced ongoing TPA development at Invitron." Under the initial agreement, announced in May 1986 ("The Pink Sheet" May 19, T&G-7), Invitron has developed and begun scale-up of a natural TPA and two forms of recombinant TPA. Searle paid Invitron $9.5 mil. for TPA development in 1986, or approximately 94% of the biotech firm's revenues. The amended agreement provides "for the further development, manufacture and commercialization" of a "comprehensive library" of molecular variant and hybrid forms of TPA created by Searle and Monsanto, Invitron reported. "Searle is planning to choose a subset of these molecules to pursue animal efficacy studies," the prospectus notes. Invitron projects that formal pre-clinical work will begin "with one or more of this subset of TPA variants in early 1988." Under the agreement, Invitron will develop "scale-up production and purification processes" for the "most promising variants and supply Searle with pre-clinical, clinical and ultimately market quantities" of the selected TPA product. Searle will reimburse Invitron for costs associated with production and will pay manufacturing and royalty payments upon commercialization. Invitron has already manufactured for Searle approximately 385 grams total of the two recombinant TPA forms covered by the earlier agreement. Based on an estimated typical dose of 100 mg, Invitron noted that the amount of recombinant TPA already manufactured would be "sufficient for some 3,850 doses." The biotech firm said it believes that "only a few companies have produced as large a quantity of TPA." Although the Searle TPA is behind several other TPA products in the race to reach the U.S. market first, the Invitron prospectus is optimistic over the long-term. Despite the long lead times enjoyed by Genentech and Burroughs Wellcome, Invitron cited its own "large scale, cost-effective manufacturing capacity" and "Searle's worldwide sales network" to make a case for Searle's long term chances to capture "a significant share of the TPA market." Searle and Invitron are also collaborating on the development of azurophil-derived bactericidal factor (ADBF), a recombinant antimicrobial agent discovered at Cornell ("The Pink Sheet" Aug. 24, T&G-6). Invitron is touting the product as a "potent, rapidly acting broad spectrum antimicrobial" that "may be less toxic or allergenic" than traditional antibiotics and "less immunogenic" than antibody mediated agents. ADBF "may have therapeutic applications for a wide range of infectious diseases, including gram-positive and gram-negative bacteria and certain fungal diseases," the prospectus notes. Invitron has an agreement with the Rockefeller University and Cornell covering rights to the compound; under the terms of the agreement, Invitron's license is exclusive until the earlier of nine years from the time the description of ADBF research was delivered to Invitron or five years from the date of commercial sale. Invitron also has a number of other proprietary products in development at its Redwood City, Calif. research facility. The list includes an in vivo monoclonal parathyroid imaging agent, now moving into Phase I clinicals; protease nexin I, a naturally occurring protein with potential in treating cancer, blood clots and inflammation; a monoclonal antibody-based device for treating hypercholesterolemics; and a B cell lymphoma monoclonal for ex vivo treatment of diseased bone marrow. In addition to developing proprietary products, Invitron is also looking to establish a position as a contract manufacturer of biotech products specializing in animal cell cultures. The company said it has "completed or is performing evaluation or small-scale production contracts for approximately 35 customers," including Bristol-Myers' subsidiaries Oncogen and Genetic Systems, Cal Bio, Nordisk, Sandoz, Searle, and Xoma. The contracts have involved "approximately 61 different cell lines and the production of approximately 425 grams of various products including monoclonal antibodies, hormones and coagulation factors," the prospectus reports. Invitron's St. Louis, Mo., manufacturing facility currently has annual capacity "sufficient to permit the simultaneous manufacture of kilogram quantities of products from multiple cell lines having diverse culture requirements," the prospectus notes. The company plans to use some of the proceeds of the stock offering to expand the facility by 1990. Invitron hopes to raise over $30 mil. from the 3 mil. share offering. The initial offering price is $11 per share. Following the offering, Monsanto will hold a 10% stake in Invitron. The venture capital firm, Alafi Capital, will hold 64% of Invitron shares. The company was initially organized by Monsanto and Alafi Capital in 1984. Alafi Capital General Partner Moshe Alafi has served as chairman of the board of Invitron since the biotech company's inception. Monsanto Senior VP-R&D Howard Schneiderman, PhD, also serves on the Invitron board. President and chief executive officer of Invitron is Charles Benton, PhD, who joined Invitron in 1984 from Genentech where he was a senior research scientific administrator. Heading Invitron R&D as of Sept. 1 is Peter Reeve, PhD, who joins the biotech firm from SmithKline Beckman where, most recently, he was group director-biotechnology development and planning. In addition, Invitron's management team includes former Monsanto Fellow and research chemist William Tolbert, who holds the title of VP-technology development. The prospectus notes that Tolbert "was responsible for the invention and development of a majority of the mammalian cell culture technology licensed to Invitron from Monsanto."

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