BioWorld International Correspondent

PARIS - GenOway SA signed a research collaboration agreement with the Australian biotechnology company CopyRat Pty. Ltd. for the development of knockout/knock-in rat models.

The deal calls for Lyon-based GenOway to incorporate CopyRat stem cells in its proprietary cloning procedures in order to develop disease models with a higher degree of predictability. Financial terms of the deal were not disclosed.

The CEO of GenOway, Alexandre Fraichard, stressed the superiority of rat models over mice models for the study of human disease and the development of new drugs in therapeutic areas such as diabetes, cardiovascular disease and neurological disorders. "The purpose of this collaboration is to be able to do with rats what we can already do with mice," he told BioWorld International.

GenOway provides in vivo and in vitro research models that are designed to enhance the efficiency of gene validation, drug screening and preclinical development activities. It has developed both animal models, using transgenic mice and rats, and in vitro models, using embryonic stem cell differentiation, to study genetically engineered cells.

For its part, CopyRat, of Melbourne, specializes in rat and cellular models of human disease. The company is a spin-off from Monash University, which has granted it exclusive rights to intellectual property and know-how in the areas of rat embryology and the isolation, culture and genetic modification of rat stem cells.

The companies said the combination of their technologies would enable them to "bypass the major technological barriers to the development of rat models" and facilitate targeted genetic manipulation in rats. The initial research program is expected to take less than 12 months since, as Fraichard explained, both companies are already heavily committed to this area of research, so "we will not be starting from scratch."

The first step had been to successfully breed living cloned rats and obtain embryos from them. GenOway achieved that toward the end of 2001, after carrying out a nuclear transfer program to produce genetically modified rats. Fraichard added that there would be a follow-up to its collaboration with CopyRat, since it would create "close and strong ties between the two companies."

GenOway said it has a "complete range of validated technological solutions to overexpress or delete genes," including random integration of transgenes for mouse and rat models and knockout/knock-in models using embryonic stem cells in the mouse. Knockout/knock-in procedures entail the extraction of a gene from an animal and its replacement by a modified, humanized gene.

It is now developing a new proprietary homologous recombination technology called Rapid Knock Out, which will enable it to complete a knock-in within 12 months instead of 18 months. Fraichard said that technology was being developed in mice to start with and would be extended to rats later.

Meanwhile, he said the 16 million funding GenOway has been negotiating since the spring was making progress and would be closed in early 2003. He acknowledged that the operation had taken longer than planned because of the unfavorable investment climate in the biotechnology industry, but said a term sheet had now been signed. Founded in 1999, the company has so far raised a total of 12.5 million in three stages, the last of which came in December 2000.

GenOway has contracts for its in vivo and in vitro target validation services with more than 30 companies and research establishments in 13 countries. Those contracts are worth a total of about 3.5 million, and will propel the company's revenues to 13.5 to 13.8 million this year from 1700,000 in 2001. GenOway hopes to be breaking even by the end of 2004 and to generate a profit in 2005.