BioWorld International Correspondent

PARIS - Serono SA and Nautilus Biotech signed a co-development and commercialization agreement for a next-generation human growth hormone designed to have an improved biological, pharmacological and clinical profile, allowing less-frequent injections of the protein than the daily doses currently administered.

Nautilus Biotech is granting Geneva-based Serono an exclusive license to develop the hormone, plus an option to license worldwide rights to develop, manufacture and commercialize improved variants generated by Nautilus' rational evolution technology, a process that mimics natural evolution.

In return, Nautilus will receive an initial fee and potential milestone payments related to development stages, regulatory submissions and approvals. If a new growth hormone is developed and registered worldwide, and if Serono exercises its option, those payments could total as much as €19 million. Nautilus also would receive undisclosed royalties on sales.

Nautilus Biotech, which is based at Genopole, France's national biotechnology science and business park at Evry, specializes in the production of improved proteins, vaccines, enzymes and cell lines using a technology it calls "directed evolution." Its platform embodies a high-throughput, systematized environment for performing protein-directed evolution, protein functional analysis and cell line optimization.

To generate variants of proteins with enhanced effectiveness, it associates the predictive data obtained by computer algorithms with advanced protein engineering involving changes in some proteins' amino acids. The company has developed a pipeline of improved therapeutic proteins with single amino acid substitutions. It also has filed patents on 20 improved cytokines, which is the intellectual property Serono is accessing, Nautilus CEO Manuel Vega said.

Vega said that Nautilus would handle most of the preclinical development, including validation in vitro and in animals and pharmacological profiling. Serono will handle the rest, including regulatory filing and commercialization.

Commenting on the agreement, Serono's senior executive vice president of research, Tim Wells, said: "We believe that the rational evolution technology of Nautilus represents a promising approach to generate growth hormone variants with great potential to deliver improved patient care."

The most advanced products in Nautilus' own product pipeline are long-lasting versions of interferon alpha and interferon beta. In addition, it has developed an optimized Rep protein that boosts the production of AAV (associated adenovirus) in gene-therapy applications.

Nautilus also generates revenues from service activities, which mainly entail supplying third parties with optimized cell lines. Its main customer is Aventis Pasteur, the Lyon-based vaccines division of Sanofi-Aventis Group, with which Nautilus signed an agreement in September 2002 to develop improved producer cell lines for vaccines being developed for three specific (but undisclosed) targets. As well as research funding, Nautilus is to receive milestone payments and would get royalties on product sales, while Sanofi-Aventis will have exclusive worldwide rights to use the cell lines optimized by Nautilus for manufacturing and commercializing the vaccines

Nautilus Biotech has a U.S. subsidiary in San Mateo, Calif., which is responsible for business development.