Geron Corp. and Exeter Life Sciences Inc. formed a new company and in-licensed a portfolio of animal cloning technologies, including the technology used to create Dolly the sheep in 1997.

The joint venture, stART Licensing Inc., will manage and license intellectual property that was originally developed at the Roslin Institute in Edinburgh, Scotland. Geron is providing rights to the Roslin technology and patents for animal cloning work, while Phoenix-based Exeter is contributing rights for proteins expressed in animal milk.

Geron "has received an up-front payment," said David Earp, Geron's chief patent counsel and senior vice president of business development, and there will be future distribution of revenue "according to equity share."

Exeter agreed to take care of the company's initial capital and will own 50.1 percent.

"It was a sensible, strategic move for us to put these assets into a company that was absolutely focused on generating revenues from granting licenses," Earp told BioWorld Today. "We had been licensing the technology for a wide variety of purposes, but, for us, that was not the focus of Geron," which is developing a therapeutics platform in oncology and embryonic stem cell research.

Geron acquired its share of the animal cloning technology through the 1999 acquisition of Roslin Bio-Med, the company founded on the intellectual property used to clone Dolly, specifically the nuclear transform cloning platform. Geron later licensed that technology to Exeter's subsidiary, ViaGen Inc., of Austin, Texas, to clone cattle and pigs. Meanwhile, Exeter was building up its own intellectual property portfolio by acquiring in 2003 the use of Roslin technology for producing proteins in the milk of animals from the now-defunct PPL Therapeutics Inc., of Edinburgh.

"So, basically, this is all the rights from Roslin brought together in one entity," Earp said, adding that the three capital letters in stART Licensing stand for "Advanced Reproduction Technologies."

Exeter also is contributing the rights to other cloning technologies, such as the chromatin transfer technology developed at the University of Massachusetts. The head of Exeter's biotech IP licensing and investment division, Scott Davis, was named president of the new company. Davis also founded ViaGen.

The technology offered by stART has two broad applications. In agriculture, the cloning platforms have a "potentially large upside" in improving the quality and consistency of animal herds more effectively than conventional breeding, Earp said. "And, in the pharmaceutical area, it allows the ability to produce antibodies in animals and secrete therapeutic proteins in their milk."

It is the second joint venture established by Geron in 2005. Last month, it teamed up with the Biotechnology Research Corp. in Hong Kong to form TA Therapeutics Ltd., which focuses on developing telomerase activator drug candidates. Under the terms of that deal, BRC is providing scientific leadership, a research team, capital and laboratory facilities, while Geron agreed to contribute an undisclosed amount of capital, scientific leadership, development expertise and intellectual property. (See BioWorld Today, March 3, 2005.)

As revenue begins to come in from licensing deals, Geron expects to use its share of the profits to help fund ongoing therapeutic programs, such as the development of its cancer vaccine, which in Phase I trials sponsored by Duke University Medical Center.

Its small-molecule telomerase activators, GRN163 and GRN163L, are in late-stage preclinical development. Geron has reported that both are direct enzyme inhibitors that can work at low concentrations to minimize toxicity.

Also in preclinical development is the company's cell-based therapeutic program, derived from human embryonic stem cells, to treat chronic diseases such as Parkinson's disease, spinal cord injury, cardiomyocytes for heart disease and pancreatic B cells for diabetes.

Shares of Geron (NASDAQ:GERN) rose 22 cents Wednesday to close at $5.95.