SYNBIOTICS SEEKING U.S. PARTNERS FOR HOLLOW FIBER MAMMALIAN

SYNBIOTICS SEEKING U.S. PARTNERS FOR HOLLOW FIBER MAMMALIAN cell production system. The San Diego firm is looking for marketing and financing partners for the project, being conducted under the auspices of a newly formed company, UniSyn. At a recent health care industry conference sponsored by Hambrecht & Quist, Synbiotics VP Martin Nash explained that the company is searching for "venture capital partners to provide initial funding in return for equity." Nash maintained that the bulk of the initial development work has already been accomplished. "The product is largely done and we do not require development funds or development technology from a U.S. partner," Nash said. Synbiotics "would prefer funding by a U.S. partner to some extent in return ]for[ equity and marketing rights." The hollow fiber mammalian cell-culture production system is based on kidney dialysis technology. It is designed to replace harvesting of cells from mice. The Synbiotics exec that "to produce one kilogram of antibody would require about 25,000 mice by conventional data," which "is clearly a management issue." The hollow fiber system, by comparison, would require "60 cartridges . . . and 10,000 liters of nutrient." Nash said that the system is suitable for pilot plant and lab use and could be adapted to product pharmaceutical quantities. Synbiotics projects the U.S. market for the hollow fiber system in the $150-$175 mil. range. During the development phase, Synbiotics has been working with two Japanese firms. In addition to seeking U.S. partners for the spinoff corporation, Nash said Synbiotics is negotiating with a Japanese partner to provide "funding and some materials handling technology which we could adapt to the system. In return, we could yield marketing rights in certain geographic areas and an equity position." The hollow fiber system is a sidelight for Synbiotics. The company's primary focus has been the development of anti-idiotypic antibodies, second generation monoclonal antibodies. The anti-idiotypic antibodies are designed to bind to monoclonals desinged for specific antigens. The company explains that the anti-idiotypic monoclonal antibody exhibits a structural similarity with the original antigen. The anti-idiotypes may have usefulness as vaccines or allergy treatments. Synbiotics has relied on several corporate development deals to raise funds since its inception in 1982. It was originally started as a spinoff of the Scripps-Miles research effort to provide contract research for Miles Labs and American Hospital Supply. The company continues to be the supplier of Miles drug monitoring monoclonals. In 1987, the company contracted with SmithKline Diagnostics to market physician and laboratory diagnostic tests. SmithKline recently cancelled the agreement, however. The project had been expected "to generate $1.7 mil. in licensing and development fees and up to $25 mil. in manufacturing revenues over the five year term of the agreement," according to an earlier Synbiotics publication. Synbiotics says that it has already received $850,000 from the agreement. Referring to SmithKline's recent management upheaval, Synbiotics said company "officials are not able to confirm whether the SKD cancellation was in any way connected with the recent management changes at SKD and its SmithKline Beckman parent." The company stressed that the SKD agreement did not relate to its anti-idiopathic products. SmithKline's Norden Labs is one of the distributors for Synbiotics veterinary products. Another corporate arrangement reached in 1987 with International Minerals and Chemical Corporation (IMC) for $6.75 mil. has Synbiotics developing commercial applications of its monoclonal antibody technology for IMC animal products. In exchange for R&D funding, Synbiotics gave IMC exclusive marketing rights. IMC's Pitman-Moore business is also a veterinary distributor for Synbiotics. The firm has also raised funds through two R&D partnerships and two public offerings. In 1986 and 1987, Prutech Research and Development Partnership II invested a total of $9.8 mil. in Synbiotics for the R&D of 11 veterinary immunotherapeutic and diagnostic products. Synbiotics has