BioWorld International Correspondent

PARIS - Vivalis SA completed an initial funding round in which it raised €3 million from three French venture capital funds.

The new investors in the Nantes-based company, which cultivates stem cells from transgenic animals, are, in order of their investments: Fonds de Co-investissements pour les Jeunes Enterprises, a start-up investment fund managed by Paris-based FP Gestion; Créagro, of Paris, an investment fund that supports companies developing new technologies for the agro-food industry; and Pays de Loire Développement, the state development agency of the Nantes region.

Up to now, Vivalis, which was founded in 1999, was a wholly owned subsidiary of Groupe Grimaud, the family firm of its CEO, Franck Grimaud. Grimaud told BioWorld International that his company, which is specialized in genetic selection, remains the majority shareholder in Vivalis, but declined to specify the holdings acquired by the three new investors.

Grimaud said Vivalis would use this injection of funds to "go as far as possible with protein expression in eggs" and develop an industrial-scale capability in protein production. The company's future was an "industrial" one, rather than one based solely on a technology platform, he said. In particular, it is building a GLP/GMP facility for cultivating new cell lines to be used in the production of vaccines that are due to enter clinical development in 2005-06, and Grimaud said this facility would be operational by May or June.

Vivalis has developed a technology for cultivating embryonic stem (ES) cells in transgenic chickens and rabbits, and uses the technology to produce therapeutic recombinant proteins (such as antibodies, peptides and cytokines) in the eggs of genetically modified chickens, as well as stem cells, primary cells and cell lines for the biopharmaceutical industry, in particular for vaccine production.

The funding was completed shortly before Vivalis signed two research contracts in January with the American animal health company Merial and its subsidiary, Hubbard ISA, both based in Duluth, Ga. Merial is to test the feasibility of using the French company's stem cell lines in the production of its avian vaccines, while Hubbard, which claims to be the world's leading poultry breeder, is to evaluate the potential of using Vivalis' avian embryonic stem cells to enhance the performance of its breeding activities. The deals provided for Vivalis to receive an undisclosed up-front payment, annual research funding, possible milestones and potential royalties.

Vivalis concluded another research agreement in September with Lyon-based Aventis Pasteur, part of the Franco-German pharmaceutical group Aventis SA, which is evaluating the possibility of using Vivalis' avian stem cell lines in its vaccine production.

Vivalis also plans to take advantage of its greater financial resources to recruit additional research and management staff to enable it to negotiate further research collaborations with European and American companies. In that regard, Grimaud said it expected to conclude within the next few weeks a more important and lucrative partnership agreement than those it has already signed.