Hematech Achieves Milestone in Development of Human Polyclonal Antibody Production System

Business Wire, June 2, 2004

Health/Medical Writers

BIOWIRE2K

SIOUX FALLS, S.D.--(BUSINESS WIRE)--June 2, 2004

- Gene targeting technology used to remove bovine antibody genes and genes for prion proteins that can cause mad cow disease -

- Technology published in Nature Genetics -

Hematech, LLC and Kirin Brewery Company, Ltd, announced today that Hematech has reached a milestone in the development of its bovine production system for the creation of fully human polyclonal antibodies. The milestone was achieved with the successful production of calves that carry the human heavy and light chain antibody genes but lack both copies of the bovine heavy chain antibody gene (or the immunoglobulin gene). As a result, Hematech received an undisclosed milestone payment from its collaborator, Kirin Brewery Company, Ltd., of Tokyo, Japan. The sequential gene targeting technology that enabled Hematech to knock out the bovine heavy chain antibody genes will be published by researchers from Hematech and Kirin in the June 6, 2004 Advanced Online Publications on the Nature Genetics website.

Using this technology, Hematech and Kirin have also genetically engineered a bovine embryo by removing both copies of the gene that activates the production of prion proteins. Prion proteins that are misfolded can cause bovine spongiform encephalopathy (BSE), commonly known as mad cow disease. If live animals are produced from these embryos they will be prion free and thus unable to contract mad cow disease. These animals will be ideal for the production of the companies' fully human polyclonal antibodies.

"Our goal is to develop a bovine production system that will enable Hematech to rapidly produce unlimited quantities of safe, fully human antibodies for a variety of therapeutic uses," said James Barton, Chief Executive Officer of Hematech. "By knocking out both copies of the bovine immunoglobulin gene, we have been able to reduce the amount of circulating bovine antibodies in the blood, and thus expect a significantly increased yield of human polyclonal antibody product. If we secure similar results with our prion knockout we will be that much further along in our goal of producing fully human polyclonal antibodies from our genetically modified cattle."

"Our scientists, in collaboration with Kirin, were able to target the silent immunoglobulin gene by developing a method called sequential gene targeting. This targeting strategy enabled complex genetic modifications to be made in large animals in a relatively straightforward and time efficient manner," stated James M. Robl, Ph.D., President and Chief Scientific Officer of Hematech. "Furthermore, we believe that sequential gene targeting may be used to target and knock out other key genes, such as the prion protein gene."

About Hematech's Antibody Production Technology:

Hematech is developing a bovine production system that will enable the company to rapidly produce unlimited quantities of fully human antibodies. These polyclonal antibodies can be used for a wide variety of therapeutic applications, including immune deficiency, infectious disease, cancer, autoimmune disease and biodefense. The bovine production system is created by introducing the full, unrearranged sequences for both the human heavy and light chain antibody genes into cows, using a human artificial chromosome (HAC) vector, developed by Hematech's collaborators at the Kirin Brewery Company. The HAC is inserted into bovine fetal fibroblast cells and cloned cattle are produced from the modified cells. Hematech has demonstrated that the human chromosome fragment was retained in the cloned cattle and the human antibody genes carried on the chromosome fragment underwent normal processing. Human antibody proteins were detected and collected from the blood of newborn calves. The details of the sequential gene targeting strategy used to target and knock out the bovine immunoglobulin and prion genes are provided in the Nature Genetics paper titled, "Sequential targeting of the immunoglobulin and prion protein genes in cattle."

About Kirin Brewery Company, Ltd

Kirin Brewery's Pharmaceutical Division is applying its expertise in biotechnology towards the development of therapeutic products focusing on three core fields: renal disease, hematopoietic disease and cancer, and immune/allergic disease. Kirin developed a novel technology to introduce human chromosome fragments into animals which is applied for the production of human antibodies in cows in collaboration with Hematech, LLC. Kirin has also applied this technology on mice and developed a novel human antibody-producing mouse named TC Mouse(TM) which is commercialized on a global basis through a strategic alliance with US Company Medarex, Inc.

About Hematech, LLC

Hematech, working with its collaborator, Kirin Brewery Company, Ltd., of Tokyo, Japan, is a pioneer in the development and production of polyclonal antibodies for therapeutic uses. The Company's patented bovine transgenic technologies will enable Hematech to rapidly produce unlimited quantities of uniform, high affinity, fully human antibodies for a wide variety of disease targets. Hematech intends to build the capacity to produce a diversified portfolio of antibody products that the company will commercialize through collaborative arrangements with multiple pharmaceutical partners. For more information on Hematech, visit the company's website at www.hematech.com.