Friday, March 18, 2005, #049 (0823)

Georgian clinic, U.S. partners set sites on global expansion
Local phage center merges with American company in hope of providing treatment for most difficult infections

By Warren Hedges

Rather than sell their unique medical center for a onetime payout, the managers of the Phage Therapy Center in Tbilisi have just agreed to a partnership with an American company that will let them retain an active role in the development of a cutting-edge medical treatment largely unheard of in the West.

"It was just the opportunity we were looking for," says Vakhtang Beridze, director of the Phage Therapy Center, which has just merged with the California-based Phage International Incorporated (PII).

The merger, announced March 1, is based on an exchange of stock through which the Georgian owners of Phage Therapy Center transferred the company to PII and received shares in the American company. Phage Therapy Center in Tbilisi will continue to operate as a wholly owned subsidiary of PII.

Of the resulting company's 18 owners, PII notes, 12 are now from Georgia.

Both parties say the number one goal after the merger is to promote a medical treatment that is relatively unknown in the West despite decades of successful research and application in Georgia. PII's strategy to achieve this includes establishing clinics in Mexico and Latin America that would be more accessible to U.S. patients.

Bacteriophages, known as phages for short, are octopus-shaped viruses that feed on bacteria, in the process reproducing and gorging until all the bacteria are destroyed. Produced in a laboratory to target a specific bacterium, for example a strain of staphylococcus, the phages can be applied to wounds or surgical incisions as an alternative to antibiotics. And while new bacteria have emerged that are resistant to antibiotics, bacteria are unable to defend themselves from phages.

"We are extremely delighted to merge with the Phage Therapy Center. The people of PTC are very dedicated to what they are doing and have expertise that is available no where else in the world," Ronald Goossens, President and CEO of PII, told The Messenger in a phone interview this week.

Like Beridze, Goossens also enthuses that the Georgian partners will have an influential role in the company. "We came into discussions with a new mindset compared to most U.S. companies. We think there is no better way to achieve our goals than to have [Phage Therapy Center] as a co-owner of the company," he said.

Dr Betty Kutter, a professor at Evergreen State University in Washington State, has become one of the leading advocates of the phage medical treatment in the United States and is encouraged by the transaction.

"I see this more as a merger than a sale, in the sense that it involves not money but equity in Phages International and the main people of the Therapy Center will be part of the board of PII, with the phage center continuing to operate as it has though as a subsidiary of PI," she told The Messenger this week. "This will bring the phage expertise of the Tbilisi Phage Therapy Center to a new group working to expand the availability of phage therapy centers."

Deadly infections prompt need for alternatives

In a news report on March 15, U.S. broadcaster CBS cited health officials as saying that in the United States alone, hospital acquired infections occurred in 2 million cases in 2004 and 90,000 of those patients died. Many of these hospital-born infections are highly resistant to traditional antibiotics, leaving patients and doctors with few alternatives.

After a year of studying and learning about phage therapy and realizing its potential in the west, Ronald Goossens, Chris Smith and David Hodges created PII in June 2004. "The more we researched, the more we realized the western world was missing out on a treatment for the most difficult-to-treat infections," PII Vice President David Hodges said.

Antibiotic-resistant infections of the ilk increasingly seen in western hospitals is just one segment PII hopes to focus on. A second direction of treatment is for diabetic patients who face infections and often amputations because of blood circulation difficulties; each year there are over 65,000 such amputations in the United States alone.

In early March executives from PII attended the Diabetic Foot Global Conference in Los Angeles and found that most of the doctors dealing with the condition had little knowledge of phage treatment.

"There is a creeping awareness of bacteria phage therapy. Physicians know the increasing extent of the bacterial infection problem but not of phages as a possible treatment," says Hodges.

As to when the U.S. Federal Food and Drug Administration would accept phages as a treatment in the United States, PII notes that this is a time-intensive process. "This won't happen any time soon," forecasts Hodges.

Unlocking potential for phages in the west

Until then, bringing in new patients and promoting awareness of bacteriophages is the main challenge and PII's present goal. "We want to serve more people and make out service available to more patients," stresses Dr Beridze.

"There is a huge market for bacteria phage therapy but the problem is how to bring technology well accepted and applied in Georgia into the U.S. medical establishment," said Hodges.

PII's current strategy is to bring phage therapy closer to U.S. medical facilities even if it cannot be practiced inside the country. "This includes having centers in Mexico and Latin America," Hodges added.

Today the Phage Therapy Center in Georgia is the only commercial clinic operating and has worked with patients from Europe, Russia and the United States. In addition it has just received funding from the Tbilisi Mayor's Office to provide free of cost treatment to any Tbilisi residents in need of phages.

While opening franchise centers abroad, PII hopes to tap into the abilities of the Georgian center. "We will actually be leveraging the technology and knowledge in Georgia to manufacture the phage treatment that would be shipped for application abroad," said Hodges.

PII president Goossens added, "in the foreseeable future, Georgian doctors will do most of the treatments in Mexico After all, most of our Georgian physicians have decades of experience in these treatments."

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