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EXHIBIT 10.29
CONFIDENTIAL
***PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE COMPLETE EXHIBIT, INCLUDING THE PORTIONS FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
COLLABORATION AGREEMENT
THIS AGREEMENT is made May 14, 1999, ("Effective Date") by and
between Xgene Corporation having a principal place of business at 000X Xxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter "Xgene") and Genencor
International, Inc., a Delaware company having a principal place of business at
0 Xxxxxxxxx Xxxxx, 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000
(hereinafter "GCI") (collectively the "Parties").
WHEREAS, GCI has developed expertise, knowledge and experience
related to, among others, specialty biochemicals for use in personal care and
skin therapies, including their production, purification, manufacture and
application;
WHEREAS, Xgene has developed expertise, knowledge and experience
related to the development of artificial skin and assays related thereto;
WHEREAS, the Parties have entered into discussions related to the
development of artificial skin assays by Xgene for use by GCI in developing
products for personal care and skin therapy treatments, including products
having low allergenicity;
NOW THEREFORE, the Parties agree as follows:
I.
DEFINITIONS
1.1 The "Research" shall mean the work performed under this Agreement by
one or more of the Parties as essentially detailed in Appendix A.
1.2 "Background Technology" shall mean any technology, data, results,
biological materials, processes, reports, or other information owned or
controlled by either Party as of the Effective Date.
1.3 "Background Patent Rights" shall mean any patent or patent
application, foreign and domestic, including any and all divisions,
continuations, continuations-in-part, reissues, re-examination applications,
extensions, supplementary protection certificates, certificates of addition,
inventor's certificates, including international counterparts thereof owned
and/or controlled as of the Effective Date by either Party.
1.4 "Inventions" shall mean any technology, data, discoveries, results,
biological materials, processes, reports, or other information, whether
patentable or not, which result
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directly and substantially from the Research as described in Appendix A during
the Term of this Agreement.
1.5 "Term" shall be 12 months or the achievement of Milestone 2,
whichever occurs earlier. In the event that an Elected Assay is incorporated
into the Research, the Term shall be extended for a mutually agreed upon time
period to allow for completion of the development of the Elected Assay.
1.6 "Xgene Core Business" shall mean the development and use of human
skin reconstituted by cell-sorted skin equivalent methodology, both in vitro
and in vivo, for any purpose.
II.
RESEARCH PROGRAM AND PAYMENT
2.1 Xgene shall commence performance of the Research promptly upon the
Effective Date and shall proceed as provided for in Appendix A. Xgene agrees to
commit reasonable facilities and resources to its allocated employees as is
reasonably necessary to carry out the Research. The Research may be redirected
in accordance with modifications and extensions only to the extent that Xgene
and GCI mutually agree upon in writing.
2.2 Payment for the Research shall be as follows:
(a) GCI shall pay to Xgene *** within 30 days of the Effective
Date.
(b) If, within 9 months of the Effective Date, Xgene has
developed an *** assay useful for the development and testing of products having
activity against human papilloma virus (Milestone 1), GCI shall pay to Xgene
***. Payment under this subsection shall be contingent upon receipt by GCI of a
written report from Xgene conclusively showing that Milestone 1 has been met and
GCI's agreement that the conclusions made in such written report are reasonable
in light of the results of the Research. Payment under this subsection shall be
due within 30 days of such agreement by GCI.
(c) If, within 12 months of the Effective Date, Xgene has
developed an *** assay useful for the development and testing of products having
activity against human papilloma virus (Milestone 2), GCI shall pay to Xgene
***. Payment under this subsection shall be contingent upon receipt by GCI of a
written final report from Xgene conclusively showing that Milestone 2 has been
met and GCI's agreement that the conclusions made in such written report are
reasonable in light of the results of the Research. Payment under this
subsection shall be due within 30 days of such agreement by GCI.
2.3 Xgene agrees that it will not perform research and/or development or
enter into any commercial agreement with any third party during the Term of this
Agreement which relates to the subject matter of (i) the Research or (ii) any
Elected Assay under Article 3.2(b) hereto without GCI's written consent;
provided that Xgene may perform research and/or development or enter into a
commercial agreement with any third party which relates to *** and the effect of
*** properties of skin.
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2.4 Xgene agrees to perform its tasks under this agreement in accordance
with standard and accepted scientific standards for such research. Xgene agrees
to submit monthly reports, in electronic and paper copy, detailing progress
relating to their responsibilities pursuant to the Research and any pertinent
findings, results, conclusions or other information resulting from the Research
to GCI. Xgene shall provide to GCI a final report summarizing the research
performed and providing conclusions and description of the developed assays
which derive from the Research within sixty (60) days of the achievement of
Milestone 2 or completion of an Elected Assay.
2.5 Should technology, market, regulatory or other considerations
suggest to either Party that continued investment of time, resources or money
towards the Research may be unsuitable or undesirable, the Parties may elect to
hold discussions toward a mutually acceptable resolution, including alternative
target proteins, the transfer or modification between the Parties of rights to
commercialize products, or termination of the Agreement, as appropriate.
III.
ELECTION OF ADDITIONAL RESEARCH ASSAYS
3.1 GCI shall have the right, at any time during the Term and for a
period of three (3) months thereafter, to request that Xgene initiate the
development of additional assays pursuant to this Agreement (Elected Assays).
Elected Assays may relate to the development and testing of products for use as
personal care or therapeutic treatments for normal skin types, aging skin types,
or specific clinical skin related conditions, as will be mutually agreed upon
between the parties.
3.2 Identification of Elected Assays
GCI may request that an Elected Assay be incorporated within the
Research by providing a written request to Xgene to develop the Elected Assay.
Elected Assays shall be incorporated into the Research pursuant to either of the
following:
(a) Election by Mutual Agreement
The Parties may mutually agree to the development of an Elected
Assay. In such case, subsequent to Xgene's receipt of the written request from
GCI, the Parties shall meet and discuss the specifics of the proposed Elected
Assay and come to mutual agreement regarding the identification of the assay, an
appropriate time line, a description of the condition or therapy upon which the
Elected Assay is to be based and a specific set of deliverables which are
expected to result from the research concerning the Elected Assay. Xgene shall
provide written acknowledgment to GCI of its agreement or refusal to perform the
research related to developing the Elected Assay within 30 days of GCI's
request.
(b) GCI Elected Assays
GCI may elect, within its sole discretion, to incorporate any of
the following as within the Research, which election is hereby agreed to by
Xgene:
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(i) The development of an assay related to ***;
(ii) The development of an assay related to ***;
(iii) The development of an assay for ***.
An election under this subsection 3.2(b) shall be considered
effective as of the date the written request from GCI is received by Xgene, who
shall then be considered to have agreed to develop the Elected Assay.
3.3 As consideration for each Elected Assay to be developed, GCI shall
make payment to Xgene as follows:
(a) *** within *** of the date that Xgene agrees in writing to
develop the Elected Assay under Section 3.2(a) or of GCI's election under
Section 3.2(b);
(b) *** upon completion of the Elected Assay, provided that,
payment under this subsection shall be contingent upon receipt by GCI of a
written final report from Xgene conclusively showing that the Elected Assay has
been successfully completed and GCI's agreement that the conclusions made in
such written report are reasonable in light of the results of the Research.
Payment under this subsection shall be due within *** of such agreement by GCI.
3.4 Notwithstanding Section 2.2, to the extent that GCI has not elected
an Elected Assay provided in Section 3.2(b), Xgene may consider offers from
third parties to participate in a development agreement related to such Elected
Assay. In the event that Xgene has received a written letter of intent from a
third party that provides for Xgene to develop an assay which includes such GCI
Elected Assay, Xgene shall provide to GCI written notice of such third party
offer explaining the assay to be developed and providing sufficient detail for
GCI to consider its interest in developing such assay (Election Notification
Letter). Within sixty (60) days of its receipt of the Notification Letter, GCI
shall exercise its option to incorporate the specific Elected Assay into the
Research. Failure of GCI to exercise its option within the relevant time frame
shall be considered as GCI's consent for Xgene to develop the assay provided in
its letter to GCI with such third party.
IV.
INTELLECTUAL PROPERTY RIGHTS
4.1 To the extent that either Party owns or controls Background
Technology or Background Patent Rights, such Background Technology and
Background Patent Rights shall remain the sole property of that Party to exploit
in any manner it chooses at its sole discretion, except to the extent
specifically provided for herein.
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4.2 Ownership of Intellectual Property from the Research
(a) Xgene shall own any Inventions produced during the Research
which relate to the Xgene Core Business or otherwise to assays using artificial
skin for the development of skin treatment compositions and to file patent
applications based thereon and prosecute same.
(b) GCI shall own all Inventions related to therapies or
personal care treatments relevant to human papilloma virus or the condition
to be reproduced by an Elected Assay.
(c) All Inventions not falling under subsections (a) or (b) shall
be owned by the inventor thereof.
4.3 Xgene agrees to promptly advise GCI in writing of any Invention(s)
made pursuant to this Agreement, but in any event no later than 30 days after
the submission of an invention disclosure to its legal department or counsel.
4.4 Preparation, filing, prosecution, maintenance and taking such other
actions as are reasonably necessary or appropriate with respect to the
development of Invention(s) as well as the costs thereof shall be undertaken by
the Party owning the Invention(s) pertaining to such filed patents and/or patent
applications. Xgene shall provide GCI with a copy of any patent application
which relates to the Research, at least 20 days prior to filing the first of
such applications in any jurisdiction, for review and comment by GCI.
4.5 Xgene represents and warrants to the best of its knowledge that with
respect to its Background Patent Rights that Xgene has title or right to its
Background Patent Rights and Background Technology, and that the grant of any
license or right to GCI contemplated in this Agreement under such rights does
not require the consent of a third party and is not encumbered by any agreement,
assignment or other encumbrance that it inconsistent with the provisions of this
Agreement.
V.
LICENSES
5.1 Xgene grants to GCI a non-exclusive, royalty-free, world wide
license to use any assays or artificial skin which are conceived pursuant to
this Agreement for any purpose. Xgene further grants to GCI a non-exclusive,
royalty free, world wide license under any Inventions owned by Xgene pursuant to
this Agreement to make, sell, use, have made, have sold, import, export or offer
for sale therapeutic and/or non-therapeutic product(s) for any application. GCI
shall have the right to sublicense under the licenses granted in this Section
5.1 for the purpose of developing, testing or confirming properties of
experimental and/or commercial products produced by GCI, to the extent Xgene may
legally confer such sublicensing rights.
5.2 Xgene shall pay to GCI a royalty based on Xgene's or its
sublicensee's commercialization of Xgene's Inventions. The royalty shall be at
least *** of the Net Revenue received by Xgene for such commercialization,
provided that, Net Revenue shall be defined
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subject to mutual agreement of the Parties. In lieu of a royalty, the Parties
may agree to *** or such other arrangement as may be mutually agreed upon
between the Parties.
5.3 With respect to any assay or other means of testing products
relevant to human papilloma virus or to the condition to be reproduced by an
Elected Assay which results from this Agreement, GCI shall have exclusive rights
to use such assay for the development of therapeutic or non-therapeutic
compounds for the treatment of skin for a one year period. The one year period
shall commence upon receipt by GCI from Xgene of a final written report
identifying and describing the assay and providing information sufficient to
confirm that the assay has been successfully developed.
VI.
RENEWAL, TERM AND TERMINATION
6.1 The Term of this Agreement shall be as provided in Section 1.5. In
the event of expiration of the Agreement due to either the non-achievement of
any milestone or expiration of Term, GCI's obligations regarding any unmet
milestones shall lapse.
6.2 Should this Agreement expire due to failure to reach a milestone,
the Parties may agree to engage in further good faith negotiations toward a
mutually agreeable resolution or continuance of the Research, which resolution
may include redefining the direction and/or the scope of the Research.
6.3 Termination of the Agreement may occur upon the following:
(a) Upon a material breach of the Agreement by the other Party.
In the event that a Party wishes to terminate this Agreement due to a material
breach, the terminating Party shall serve a written notice on the other Party
thereby allowing the other Party sixty (60) days to remedy such breach. In the
event that such breach has not been remedied within the prescribed sixty (60)
days, the Agreement shall terminate automatically;
(b) In the event that either Party becomes subject to Bankruptcy,
insolvency, liquidation or similar proceedings, the other Party shall be
entitled to terminate this Agreement forthwith.
6.4 Expiration of Term or termination of this Agreement pursuant to this
Article shall not effect the rights of either Party under Articles 4, 5 and 7.
VII.
CONFIDENTIALITY, TREATMENT OF SAMPLES AND PUBLICATIONS
7.1 Treatment of Confidential Information
(a) In order for the Parties to perform the work contemplated
hereunder, it may be necessary for each Party to disclose certain proprietary
information and/or data which is necessary to achieve the objectives of the
Research (the "CONFIDENTIAL INFORMATION").
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A recipient shall protect the CONFIDENTIAL INFORMATION against unauthorized
disclosure using the same degree of care, but no less than a reasonable degree
of care, as the recipient uses to protect its own CONFIDENTIAL INFORMATION of a
like nature; provided that:
(b) A recipient shall be obligated to protect only such
CONFIDENTIAL INFORMATION disclosed under this Agreement as is: (a) disclosed in
tangible form clearly labeled as confidential at the time of disclosure, or (b)
disclosed initially in nontangible form identified as confidential at the time
of disclosure and, within thirty days following the initial disclosure,
summarized and designated as confidential in a written memorandum delivered to
the recipient.
(c) The obligations of non-disclosure do not apply to
CONFIDENTIAL INFORMATION disclosed under this Agreement which: (a) was in the
recipient's possession before receipt from the discloser as demonstrated by
written documentation; or (b) is or becomes a matter of public knowledge through
no fault of the recipient; or (c) is rightfully received by the recipient from a
third party without a duty of confidentiality; or (d) is disclosed by the
discloser to a third party without a duty of confidentiality on the third party;
or (e) is independently developed by the recipient as demonstrated by written
documentation; or (f) is disclosed under operation of law; or (g) is disclosed
by recipient with the discloser's prior written approval. Such "CONFIDENTIAL
INFORMATION" may be designated as such by the receiving Party upon notice to the
disclosing Party.
(d) The obligation of non-disclosure shall continue for a period
of five (5) years from the Effective Date hereof, regardless of termination of
this Agreement.
7.2 Treatment of Samples
(a) GCI may supply Xgene with reasonable research quantities of
the biological material for use in the Research (Biological Material). Any
material, including any cell, vehicles, constructs, vectors, plasmids, protein
or other medium incorporating the Biological Material or a component thereof, as
well as any material that could not have been made but for the Biological
Material, are expressly understood to be part of the Biological Material,
together with all documentation and descriptions of the Biological Material.
(b) Xgene agrees not to supply the Biological Material to other
laboratories, nor to any other individual or organization other than employees
of the Xgene, and not to use the Biological Material, directly or indirectly,
for any commercial purpose without GCI's prior written approval. Any employee of
Xgene having access to Biological Material will be previously notified of and
agree to be bound by the terms of this Agreement. No employee or third party
will be allowed access to the Biological Material unless such employee or third
party is bound by an employment, confidentiality or other agreement requiring
assignment of all invention, patents and copyrights to Xgene.
(c) Xgene will not use, directly or indirectly, the biological
Material in any research programs other than as contemplated herein without
GCI's prior written approval.
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(d) Xgene acknowledges that the Biological Material is the
confidential and proprietary property of GCI and agree to take reasonable care
necessary to prevent any disclosure, unauthorized use or transfer of the
Biological Material, or any information relating to such, to any party who is
not bound by this Agreement.
(e) Xgene will not analyze, attempt to analyze, or have analyzed
the composition or formulation of the Biological Material except as specifically
provided herein.
(f) Xgene acknowledges that the Biological Material is
experimental in nature and is not for human use. Xgene agrees to handle the
Biological Material with appropriate safety precautions. GCI hereby disclaims
all express and implied warranties of any kind with respect to the Biological
Material. Xgene agrees to hold GCI harmless from any and all liability and/or
damages (including costs of defense) resulting from Xgene' use of the Biological
Material, including any use in violation of this Agreement.
7.3 Neither Party will publish any material arising from the Research
without prior written approval of the other Party. Such approval shall not be
unreasonably withheld but may be subject to a delay of up to (3) months total
for assessment of the proposed publication and to enable preparation and filing
of appropriate patent application(s). Both Parties will procure that any person
involved or interested in the Research will not publish or communicate material
arising therefrom without first complying with the provisions of this Section
7.3.
VIII.
MISCELLANEOUS
8.1 Hold Harmless
With respect to GCI's rights under Article 5, Xgene shall hold
GCI harmless for any activities thereunder which would otherwise infringe
Xgene's Background Technology or Background Patent Rights. GCI shall hold Xgene
harmless for any and all claims resulting from GCI's use of Xgene technology or
products and from the use of any therapeutic or other product developed, sold or
licensed by GCI which is developed using Xgene technology or products.
8.2 Force Majeure
Each of the Parties hereto shall be excused from performance of
its obligations and shall not be liable for damages to the other to the extent
that such performance is prevented by circumstances beyond its effective
control. Such excuse from performance shall continue so long as the condition
responsible for such excuse continues and for a thirty (30) day period
thereafter. For purposes of this Agreement, circumstances beyond the effective
control of a Party which excuse that Party from performance shall include but
shall not be limited to, act of God, act, regulations or laws of any government,
injunction or judgment of any court, war, civil commotion, destruction of
facility or materials by fire, earthquake, storm or other casualty, labor
disturbance, epidemic and failure of public utilities or common carrier.
8.3 Relationship
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Xgene and GCI are independent contractors. Nothing in this
Agreement or the course of dealing of the parties shall be construed to
constitute the parties hereto as partners, joint ventures or as agents or
distributors for one another, or as authorizing any Party to obligate the other
in any manner.
8.4 Non-Assignment
This Agreement and the covenants herein contained shall be
binding and inure to the benefit of Xgene and GCI hereto and their heirs,
assigns, successors and legal representatives. This Agreement shall not be
assignable by any Party without the other Parties' prior written consent.
8.5 Entire Agreement/Amendment
This Agreement and the attachments hereto constitute and contain
the entire agreement of the Parties respecting the subject matter hereof. This
Agreement may only be amended by mutual written agreement of the Parties.
8.6 Warranty of Right and Authority
Each of the Parties represents and warrants to the other that it
has the full right and authority to enter into this Agreement, and that it is
not aware of any impediment which would inhibit its ability to perform the terms
and conditions imposed on it by this Agreement. Nothing contained herein shall
be interpreted as a warranty, express or implied as to the patentability,
enforceability or validity of any patent application or patent owned or
controlled by either Party.
8.7 Further Acts and Instruments
Each Party agrees to execute, acknowledge and deliver such
further instruments and do all such other acts as may be necessary or
appropriate to effect the purpose and intent of this Agreement.
8.8 Severability
In the event any one or more of the provisions of this Agreement
should for any reason be held by any court or authority having jurisdiction over
this Agreement or either of the parties hereto to be invalid, illegal or
unenforceable, such provision shall be reformed within the jurisdiction of such
court or authority to as nearly approximate the intent of the parties as
possible, and if the provision is unreformable the parties shall meet to discuss
what steps should be taken to remedy the situation; otherwise and elsewhere this
Agreement shall not be affected.
8.9 Captions
The captions to this Agreement are for convenience only and are
to be of no force or effect in construing or interpreting the provisions of this
Agreement.
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8.10 Counterparts
This Agreement may be executed in two counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
8.11 Limitation of Liability
No Party shall be liable to another for indirect, incidental,
consequential or special damages, including but not limited to lost profits,
arising from or relating to any breach of this Agreement, regardless of any
notice of the possibility of such damages. In no event shall either Party be
liable for damages relating to lost profits or reasonable royalties or special
damages due and payable to a third party on the basis of the other's sale of a
product developed hereunder.
8.12 Publicity
Either Party's use of the other Party's name or disclosure of the
existence or nature of this Agreement or the relationship created thereby to any
third party shall be only with the prior written consent of the other Party,
which consent will not be unreasonably withheld.
8.13 Interpretation
This Agreement has been jointly prepared by the Parties and their
respective legal counsel and shall not be strictly construed against either
Party.
8.14 Notices
Representatives for the receipt of payments, notices, records,
reports and other information pursuant to this agreement shall be as follows:
For GCI:
Attn: Legal Department
Genencor International, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx XX 00000
For Xgene:
Xgene Corporation
000X Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
8.15 Controlling Law
This Agreement shall be governed and construed in accordance with
the Laws of the State of New York, excluding any choice of law rules which may
direct the application of the law of any other jurisdiction. Questions effecting
the construction and effect of any patent rights
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arising hereunder shall be determined by the laws of the country in which such
patent rights have been applied for and/or granted.
8.16 Negation of Warranties
Nothing in this Agreement shall be construed as:
(a) an express or implied warranty or representation by Xgene as
to the validity or scope of any Background Technology, Background Patent Rights
or proprietary technology of Xgene;
(b) a warranty or representation that anything made, used, sold
or otherwise disposed of under any license granted in this Agreement is or will
be free from infringement of patents, copyrights, and other rights of third
parties;
(c) granting by implication, estoppel, or otherwise any licenses
or rights under patents or other rights owned or controlled by Xgene other than
those necessary for GCI to exercise its rights under Article 5 and 8.
8.17 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESSED OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE RIGHTS OF USE
OF A LICENSED PRODUCT OR TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR
OTHER RIGHTS OF ANY THIRD PARTIES.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
GENENCOR INTERNATONAL, INC. XGENE CORPORATION
By: /s/ XXXXX X. XXXXXXX By: /S/ XXXXX XXXXXXXXX
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Name: Xxxxx X. Xxxxxxx Name: Xxxxx XxXxxxxxx
---------------------------- ---------------------------
Title: Senior VP, Technology Title: Chief Financial Officer
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APPENDIX A
XGENE CORPORATION
DETECTION OF POSSIBLE ANTI-VIRAL ACTIVITY AGAINST
HUMAN PAPILLOMAVIRUSES IN
CULTURE *** FROM ***
SPECIFIC AIMS
The objective of this project is to ascertain if the culture ***
from ***, obtained in large amounts by Genencor, Inc, possess an antiviral
activity against human papillomaviruses (HPV), as previously suggested. This
contract covers the development of a reliable model system that recapitulates
HPV infection in a differentiated skin epithelium, including known effects on
differentiation of the epidermis. In the first stage, a mouse animal model will
be utilized along the lines of that already developed by the primary
investigator, and adapted for recapitulation of normal HPV life cycle. In the
second stage, a multi-well in vitro tissue culture assay will be developed for
screening of *** fractions that may possess the anti-viral activity. If the
anti-viral activity is indeed detected some aspects of the mechanism of its
biological activity might be discerned by this research as well. We will
identify alterations in the normal viral lifecycle by monitoring epithelial cell
differentiation, and thereby localize the anti-viral activity to a specific
stage in the interaction of the virus with its host.
BACKGROUND AND SIGNIFICANCE
Human papillomaviruses infect epidermal cells causing benign
neoplasms known as warts. The common wart (verruca vulgaris) is a firm papule
with a hyperkeratotic surface that often appears on the hands and fingers. Flat
warts are more subtle in appearance, being only slightly raised papules, often
appearing in linear arrangement on the hands or face. Plantar warts appear on
the plantar aspect of the foot, are covered by a thick callus, and are usually
painful. The most serious medical studies on warts have been conducted on
venereal warts (condyloma acuminatum) that can appear on the rectum, perineal
region, inguinal folds, external genitalia, vagina, and urethra. Their
prevalence is quite high, with genital forms of HPV infection being the most
common sexually transmitted disease. Approximately 1% of sexually active adults
have genital warts, while another 10-20% have latent infections. Of greater
concern than the appearance of warts is their connection to carcinoma. HPV
infection is a major cause of cervical cancer, and even flat warts have been
linked to squamous cell carcinoma. Currently treatment is limited to destructive
painful procedures that burn away the tissue in the infected area. Physical
methods of treatment, such as cryotherapy with liquid nitrogen,
electrodisiccation, surgical excision, and laser therapy are therefore limited
to destruction of infected tissue, as are the chemical methods, such as
salicylic acid, and podophyllin.(1-2)
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A serendipitous discovery may have provided us with a new anti-viral
to warts. Large scale culturing of *** at Genencor leads to the creation of
large volumes of *** as a byproduct of the industrial process, and this *** was
noticed to possess an HPV anti-viral activity. Documentation of this observation
as fact would lead to a valuable new product for Genencor. Firstly, the initial
observation of this activity belongs to Genencor as its sole intellectual
property, and secondly Genencor is uniquely positioned to take advantage of this
observation since it is the largest producer of the *** and has excellent
personnel and facilities for fractionation and purification of the activity.
What has been missing is a biological assay to evaluate the *** and
partially purified fractions. This contract provides the missing assay by
funding a well known research dermatologist from Stanford in their new corporate
structure, Xgene Corporation. The problem with the assay stems from the present
state of the models used for studying HPV infection. Following infection of
basal cells, HPV episomes are maintained at 20-50 copies per cell, and it is not
until non-dividing daughter cells begin to migrate to the terminally
differentiated layers that late gene expression is induced. It is unlikely that
anti-viral activity could be assessed without inducing at least some of the
normal differentiation program of epithelial cells, where the viral lifecycle
progresses towards production of new viral particles. The epithelial cell of the
skin is the keratinocyte, and normal human keratinocytes (NHK) are the natural
host for HPV. Currently, cultures of keratinocytes cannot be brought to
differentiation unless grown in raft cultures, a cumbersome technique where
keratinocytes are grown on top of a dermal layer and the whole construct is
raised to an air-liquid interface to induce the differentiation of the
keratinocytes.(3)
This contract with Xgene Corporation is to provide Genencor, Inc.
with a biological assay to assess anti-viral activity. Xgene is uniquely
positioned to provide workable assays for HPV anti-viral activity since it has
an intellectual property position on technology to recapitulate the normal
differentiation pattern of keratinocytes in a reconstituted human skin model.
While in the Dermatology Department at Stanford University, Xx. Xxxxxxxx and his
laboratory developed a unique method for reconstituting full-thickness human
skin that allows for normal differentiation of the epidermis (patent
pending(4)). Importantly, tissue cultured cells are used in these
reconstitutions, thus offering the unique opportunity to go from separated
tissue culture cell populations back to a reconstituted organ, a unique feat in
organotypic modeling of skin. The plan is to use keratinocyte cell lines that
maintain the HPV episome in these skin reconstitutions, thus providing a
uniformly HPV infected skin on which to assay for anti-viral activity.
RESEARCH DESIGN AND METHODS
Phase I The novel skin reconstitution system is termed a CSSE (cell
sorted skin equivalent), and has been proven to provide a full-thickness skin
that maintains many of the aspects of normal skin, including a normal
differentiation pattern of the epithelium. In the first phase we will set up the
CSSE grown on the backs of severe immunocompromised mice (SCDDs) because this is
the system that is currently available for achieving normal keratinocyte
differentiation in the epidermis. SCIDs have been noted to have nearly double
the success rate of nude mice for the grafting of
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endogenously infected skin tissue.(5) A mixed cell slurry containing
approximately ***, and an approximately equal number of keratinocytes is placed
into a silicone chamber (CRD chamber, Xxxxxx) implanted directly on mouse muscle
fascia. After 1 week the upper part of the chamber is removed to allow drying of
the wound and exposure to an air interface, a crucial step in triggering full
epidermal differentiation.
We will utilize keratinocyte cell lines that already have
incorporated the HPV viral episome, making the reconstituted skin more uniformly
infected with BPV than might be achieved by direct infection. Another advantage
is that we do not need to handle live BPV virus, which is notoriously difficult
to grow, prepare, and maintain. Examples of epithelial cell lines we could use
are *** and ***, which maintain episomal HPV-31 and HPV-16, respectively. Both
HPV types are associated with the anogenital region, and we need to determine if
the CSSE will accurately reconstitute with these epithelial cell lines. If not,
the reconstitutions will be conducted with similar keratinocyte cell lines
derived from common skin warts. These reconstitutions are likely to be
successful because results from keratinocytes immortalized with HPV E6-E7 genes
do reconstitute in the CSSE model. Somewhat similar methods have also been
successful that did not have the advantage of normal epidermal differentiation,
for example HPV 11 infected foreskin keratinocytes implanted in renal capsules
of athymic mice (9,10). In our experiments, biopsies will be taken, thin
sectioned and stained with hematoxylin/eosin, then immunostained using antibody
reagents to a variety of skin differentiation markers, including ***.
Importantly, it has been shown that keratin 10 expression is delayed
in HPV infected skin, and is a consistent feature of the abnormal
differentiation in warts.(11) This offers the opportunity to further simplify
our assay for HPV infection in a second phase of the contract, but these
observations must first be reproduced in the CSSE model on SCIDs in order to
verify the use of persistently HPV infected epithelial cells for
reconstitutions. Using uninfected keratinocytes, we have consistently found that
keratin 10 staining in the CSSE is present in the entire differentiated
epidermis, and specifically excludes the basal keratinocyte layer alone, which
expresses keratin 5 and 14 instead. If keratin 10 expression is delayed during
HPV infection then there should be several cell layers above the basal layer
that will remain negative for keratin 10 expression. Perhaps the entire spinous
layer will remain negative, and only the granular layers will stain with the
keratin 10 antibody. If we can verify this result in the CSSE on SCIDs, we can
then attempt to extend this result to an in vitro tissue culture assay.
The benchmarks for the phase I study are (1) establishing the
usefulness of persistently HPV-infected epithelial cells to provide an active
HPV infection in a reconstituted skin model, (2) establishing a panel of
immuno-reagents to be used in the characterization of the HPV infected skin, and
showing the expected effects of HPV infection on keratinocyte cell
differentiation (3) providing an initial test for determining if the *** has a
HPV anti-viral activity. Phase I should only be used to test the crude *** since
multiple animal tests would greatly increase the cost of this phase of the
study. In order to keep down costs, and improve the efficiency of the anti-HPV
viral assay and to make it practical for screening multiple column fractions, a
second phase is proposed.
15
Thus purification and characterization of the HPV anti-viral activity can be
conducted during the second phase methodology.
Phase II The objective is to provide an in vitro tissue culture
method for screening the HPV anti-viral activity contained in *** and in
fractions. Although a single source for the anti-viral activity has been
identified (***), optimizations are likely necessary to optimize that source.
Variables created by culture conditions, including nutrients, growth period,
batch size etc. should be tested to guarantee reproducibility and optimize
activity. Likewise, storage conditions and fractionation procedures can be quite
varied and will likely create numerous fractions to test.
We envision 96 well tissue culture trays containing an in vitro
version of the CSSE created using chronically infected epithelial cell lines
***, or others.(12, 13) Spontaneous cell sorting of fibroblasts and epithelial
cells will create a dermal/epidermal junction that contains the cell surface
markers required to signal the epidermal cells to be basal in character, ie.,
have the characteristics of basal keratinocytes along the basement membrane zone
(BMZ). Any epidermal layers above this will consist of transit amplifying cells
that will express differentiation markers. An air-liquid interface is required
for full keratinocyte differentiation, but may not be required for an assay of
antiviral activity. Fewer cells will be used in the tissue culture well than in
the xxxxxxxx used on the animals and so only 2 or 3 keratinocyte layers will be
present above the fibroblast layer. This is done so that scoring the assay can
be read on the plates from above for positive or negative staining, rather than
requiring thin sectioning of reconstituted tissue. In the CSSE in situ we found
that only the basal layer keratinocytes express K5 and K14, and even the
keratinocytes just above them have turned these genes off, and are now
expressing K1 and K10. This pattern should reproduce in vitro, and would allow
us to develop a rapid screening method. As noted previously, K10 expression is
delayed in HPV infected epithelial cells. Immunostaining for K10 could be used
as at least part of the assay for antiviral activity; active HPV infection will
give a negative staining for K10, but inhibition of HPV infection by the
anti-viral activity will yield positive K10 staining. Additionally,
proliferating cell nuclear antigen (PCNA) is normally confined to the dividing
cells of the basal layer, but positive staining for PCNA is found in the upper
layers of benign warts.(14) Inhibition of HPV infection by the antiviral
activity would yield negative PCNA staining in upper keratinocyte layers. These
assays, in conjunction with direct staining for HPV viral proteins, may provide
an accurate measure of anti-viral activity. Antibody reagents have been
developed by others for the HPV L1 protein and for E1-E4 (the fusion protein of
the El and E4 regions that are also late gene products, and were mislabeled
E-regions rather than L, or late regions).
The benchmarks for the phase II study are (1) demonstrating that the
persistently HPV-infected epithelial cells can be used to reconstitute skin in
vitro in a variation of the CSSE reconstituted skin model, (2) determining which
immuno-reagents will be used to score for HPV infected skin in this model, and
(3) showing that the assay positive fractions correlate with their performance
in the animal model.
Phase III High through-put screening in vitro for fractions that
have anti-viral activity. This phase is separate because it offers the greatest
price flexibility,
16
dependent upon the number of fractions to be screened. Once a reproducibly
active preparation can be made, the fraction should be retested in the Phase I
style animal model to fully characterize effects of the anti-viral on normal
keratinocyte differentiation.
BUDGET
Phase I $50,000 to conduct the CSSE animal model experiments using
the persistently infected cell lines. Included in the cost is the use of 3 SCID
mice at the end of the study, proven successful to do a preliminary test on the
***.
Phase II *** to reduce the animal model assay to a 96 well tissue
culture assay for rapid screening of anti-viral activity. Costs are incurred to
create a practical screening method for productive HPV infection. Since current
methodology does not establish good precedents, a new method must be developed.
Multiple trials of culture conditions are anticipated increasing the cost above
that needed to do the first phase.
Phase III Charge per assay cost set at *** per tissue culture assay
well. A 96 well assay will cost *** to set up and score for activity. Any SCID
mouse assays still needed will cost *** per mouse including administration of
the test fraction, biopsy, and thin sectioning. Hematoxylin/eosin staining and
staining with antibody reagents are *** each for approximately 6 thin sections
each. This cost structure guaranteed for the first year only.
Xgene Corporation makes no future claim to ownership of the ***
anti-viral activity, and no royalty or license is requested. Genencor, Inc.
makes no future claim to the in vitro CSSE skin model or to its use for modeling
HPV infection.
REFERENCES
1. Xxxxxxxxxxx, X.X., Xxxxx, X.X. (eds): Principles of Dermatology.
2nd Ed. Philadelphia, X.X. Xxxxxxxx, 1992, pp. 66-72.
2. Xxxx, X.X. Human papillomavirus infection. (1990) X.Xx. Acad.
Dermatol. 20, 547-566.
3. Xxxxxx, C., Xxxxxxxx, X.X., Xxxxxx, X.X., and Laimins, L.A.
(1992) Biosynthesis of human papilomavirus from a continuous cell line dependent
upon epithelial differentiation. Science 257, 971-973.
4. Xxxxxx, C., Xxxx, X.X., Xxxxxxxx, X.X. Skin equivalent and
methods of forming and using same. U.S. Patent Application.
5. Xxxxxx, X.X. Xxxxxxxx, A.T., Topley, P., Xxxx, X.X., Xxxxxxxxx,
C., Xxxxx, I., and Xxxxxxx, X.X. (1995) Development and characterization of a
novel xenograft model permissive for human papillomavirus DNA amplification and
late gene expression. J. Gen. Virol. 76, 3107-3112.
17
6. Xxxxxx, M.A., Xxxxxx, J., Xxxxx, T., Xxxxx, M., Xxxxxx, M.,
Xxxxxxx, G., and Laimains, L.A. (1991) Amplification of human papillomavirus
genomes in vitro is dependent upon epithelial differentiation. J. Virol. 65,
2254-2260.
7. Frattini, M.A., Xxx, X.X., and Laimins, L.A. (1996) In vitro
synthesis of oncogenic human papillomaviruses requires episomal genomes for
differentiation-dependent late expression. Proc. Natl. Acad. Sci.93, 3062-3067.
8. Xxxxxxx, M.A., Xxxxxx, X.X., Xxxxxxx, M., and Xxxxxx, A. (1989)
Properties of a non-tumorigenic human keratinocyte cell line. Internatl. J. of
Cancer 43, 672-676.
9. Xxxxxxx, X.X., Xxxxxxx, X.X., Xxxx, X.X., Xxxxxxxx, X.X., Xxxxx,
XX, Xxxxxxxx, T.V., and Mortel, R. (1986) In vivo transformation of human skin
with human papillomavirus type II from condylomata acuminata. J,Virol. 59,
369-376.
10. Xxxxxxx, X.X., Xxxxxxx, X.X., Leure-Xxxxxx, X.X., Xxxxx, X.X.,
and Xxxxx, X.X. (1987) Laboratory production in vivo of infectious human
papilloma type 11. J.Virol. 61, 590-593.
11. Xxxxx, X.X., Xxxxxxxxx, L., Xxxxxx, P., Xxxxxx, M., Xxxxxx, C.,
and Leigh, I.M. (1993) Keratin 17 expression as a marker for epithelial
transformation in viral warts. American J. Path. 143, 1667-1678.
12. Xxxxx, L., Mikumo, R., Xxxx, H., and Lauchlan, S. (1993)
Analysis of the growth properties and physical state of the human papillomavirus
type 16 genome in cell lines derived from primary cervical tumors. Am. J.
Pathol. 143, 832-844.
13. Sterling, J., Xxxxxxx, M., Xxxxxxx, G., and Xxxxxx, T. (1990)
Production of human papillomavirus type 16 virions in a keratinocyte cell line.
J. Virol. 177, 415-417.
14. Pennys, N.S., Bogaert, M., Xxxxxxxx, U., and Xxxxx, M. (1992)
PCNA expression in cutaneous keratinous neoplasia and verucca vulgaris. American
J. Path. 141, 139-142.
18
December 9, 1999
VIA FEDERAL EXPRESS
Xxxxxx Xxxxxxxx
XGENE CORPORATION
P.O. Box 1310
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
Thank you for meeting with us on November 1 to review progress in our
collaboration, including the results of your Phase I efforts. The ability to
reconstitute the *** model with persistently infected HPV cells is an
encouraging step towards developing an *** screening system.
As you are aware, the Collaboration Agreement provides for payment of Milestone
1 upon development of an *** assay useful for the development and testing of
products having activity against human papilloma virus. Phase I of the research
plan attached to the Collaboration Agreement roughly corresponds to Milestone 1
and provides that work will be done which:
(1) establishes the usefulness of persistently HPV-infected epithelial
cells to provide an active HPV infection in a reconstituted skin model,
(2) establishes a panel of immuno-reagents to be used in the
characterization of the HPV infected skin, and showing the expected
effects of HPV infection on keratinocyte cell differentiation, and (3)
provides an initial test for determining if the *** has a HPV anti-viral
activity.
The HPV-infected cell line, HUC18, showed the ability to reconstitute the CSSE
model comparably to the control cell line as demonstrated by histological
analysis corresponding to point (1) of Phase I. However, work was not completed
with respect to points (2) and (3) of Phase I. Specifically, although
reconstituted HUC18 skin patches expressed E2 viral protein, this particular
staining reagent did not distinguish the HUC18 reconstituted cells from those of
the control cell line as a measure of viral infection. In addition, initial
tests of the crude *** on HUC18 reconstituted skin suggests that the material is
selectively cytotoxic for virally infected vs. control skin and these results
were supported by preliminary toxicity tests of *** on in vitro cultured cells.
However, these test results require further analysis and validation.
Despite Xgene not having completed the testing requires for Milestone 1 under
the Collaboration Agreement, Genencor has agreed to make the payment regarding
Milestone 1. This payment was made to Xgene on November 10, 1999. In
consideration for Genencor making early payment on Milestone 1, you have agreed
that the results not met yet with respect to Milestone 1 will be incorporated
into the requirements for Milestone 2. Specifically, Xgene will provide results
in two areas to validate the interpretation of the phase I experiments: (1) a
primary keratinocyte line will be included in the CSSE model as an appropriate
control for distinguishing viral gene expression, or another antibody will be
identified that distinguishes HPV-infected skin cells from virally-transformed
"control" cells, and (2) the application of *** on HUC-18 reconstituted skin in
the CSSE model will be repeated using appropriate control mice and time points.
All other conditions of the contract and the Milestones will remain in effect.
Thus, Xgene's achievement of Milestone 2 will continue to include the primary
objectives of Phase II, i.e., providing an in vitro tissue culture method
for screening the HPC anti-viral activity contained in *** and fractions.
19
December 9, 1999
Page 2
Please provide your acknowledgement by signing below and returning the executed
copy to us.
Sincerely yours,
/s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx, Ph.D.
Senior Vice President, Technology
MVB/CLS/klg
Encl.
By: /s/ XXXXXX XXXXXXXX
---------------------------
Xxxxxx Xxxxxxxx
XGENE CORPORATION
2
