Ready for Blastoff : Tustin Research Firm Techniclone Gearing Up for Growth

TUSTIN — After struggling through 15 lean years to develop treatments for cancer, Techniclone Corp. sees itself on the verge of growth.

The Tustin research company said Tuesday that it is beefing up its executive corps and aims to recruit a new chief executive with big drug-company background to marshal the enterprise through clinical trials of its treatments for a variety of cancers.

Among other things, the company aims to prove in U.S. tests in cancer patients that its treatment for brain cancer works as well as a recent trial on eight Chinese patients indicated. In the Chinese trial, seven patients who had been expected to die within six months have survived for periods of a year to 18 months, say officials.

“We think we have found the Achilles’ heel of cancer,” said Dr. Alan Epstein, the company’s scientific director. He said tests of the treatment on 32 other Chinese patients with tumors of other types also appear promising.

Other medical scientists unaffiliated with Techniclone agree that its cancer treatments look promising, though they must be proven successful in extensive trials on patients in U.S. trials before they can be worth acceptance.

To prepare for a launch of U.S. studies later this year, Lon Stone, the company’s founder, chairman and current chief executive, said he plans to turn over the CEO reins to an executive with savvy in such areas. Stone says there are two types of CEOs--those who start companies and those who build them--and the company needs a builder now to take it to its next phase.

Stone, who owns about 5% of the company’s stock, would remain as the company’s chairman for four years to assist the new recruit in efforts to take its products to market.

In addition, the company, which has 45 employees, aims to hire several other executives to bolster its expertise in management of clinical trials, product development and licensing.

The company, which has no sales or earnings, has gone through the typical ups and downs of a struggling biotech firm with little financial support.

It raised $2 million in an initial public offering in 1983, raised about $1 million a year from private investors, worked to develop Epstein’s ideas and kept a modest staff. When it lost funding in 1990, its payroll dropped from 12 to two--the jobs held by Stone and the manufacturing executive.

However, scientific advances have helped attract private investment--$8 million in late 1995, $11 million this spring. The company is in late-stage trials on a treatment for lymphoma. And in the last year, employment has doubled to 45.

Its biggest hopes for the future largely rest on Epstein’s idea that one way to treat--and possibly kill--”hard” tumors of the brain, lung, colon or prostate is to attack the tumor’s own dying tissue.

While most tumor research focused on developing ways to kill a tumor’s live tissue, Epstein is developing a way to first attach a tumor-killing payload on dead tissue, then launch the payload into live tissue.

Dr. Alan Waxman, director of nuclear medicine at Cedars Sinai Medical Center, described the concept of attacking dead cells as a “novel way of treating cancer” that appears “terrific.” But he cautioned that it’s far too early for anyone to say whether the concept will really work.

“The clinical trials really need to be done,” he said.

Only one analyst follows the company’s stock, which trades as a small cap on the Nasdaq, and closed Tuesday at $4.32 a share. However, Stone says that the capital infusion in April has fortified the company’s balance sheet and it has applied to be listed nationally on the Nasdaq.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Techniclone Corp. at a Glance

* Headquarters: Tustin

* Business: Researches and develops cancer treatment drugs

* Chairman/President/CEO: Lon Stone

* Employees: 22

* Status: Public

* Exchange: Nasdaq small cap

* Tuesday’s close: $4.31, unchanged

Source: Bloomberg News