OTC News Archive

UT technology will be used to fight AIDS

Austin-based company will build device to improve treatment in developing countries

By Renuka Rayasam, Austin American Statesman
July 9, 2004

A toaster-sized device developed at the University of Texas that holds promise for helping treat people with HIV in developing countries will be unveiled next week at the International AIDS Conference in Bangkok, Thailand.

The device allows doctors in remote areas to quickly and cheaply conduct a key diagnostic test that now requires a huge and expensive machine.

Heavyweight organizations such as the Bill and Melinda Gates Foundation and the Doris Duke Charitable Foundation helped pay for the development of the device.

Richard Hawkins, a longtime Austin entrepreneur, has been lured out of semi-retirement to run LabNow Inc., the company created to make and market the device.

“This project has the chance to change the way the disease is managed,” Hawkins said Tuesday, as he was getting ready to leave for Bangkok.

UT chemistry professor John McDevitt developed the microchip sensor technology the machine uses to count a type of white blood cell in HIV-positive patients in 10 or 15 minutes instead of days.

That’s the most important test in helping doctors determine when to start treatment and how to tailor the so-called drug cocktails that patients take, said Frank Young, a former Food and Drug Administration commissioner. He is now chairman and chief executive officer of the Cosmos Alliance, a Washington-based biotech investment group that examined LabNow’s technology.

The cost of drugs to treat AIDS in developing countries has fallen to $300 a year or less per patient, according to the United Nations AIDS program UNAIDS, thanks to government purchasing programs and generic versions. LabNow’s device will help doctors decide how to best use the drugs.

“For developing countries, this is going to be extremely important,” Young said.

Existing devices that measure the cells, called CD4 lymphocytes, are as big as refrigerators and cost about $75,000. Hawkins said he hopes to get LabNow’s device down to $1,000, with each test costing $5.

The United Nations estimates that 38 million people worldwide are infected with HIV and that 90 percent of people who urgently need treatment aren’t getting it. In sub-Saharan Africa, 25 million people are infected, and Asian countries have seen sharp increases. In sub-Saharan Africa, only about 50,000 patients got a CD4 test last year, Hawkins said.

In the United States and Europe, by contrast, patients would be tested every three months.

McDevitt and three other UT professors developed the microchip in 1996. Two years later, UT licensed the technology to a company called Labnetics. But after the company failed to raise enough money to market the product, the university bought it back three years later.

In 2001, McDevitt met Dr. Bruce Walker, a leading AIDS researcher, at a Harvard University seminar. Walker quickly realized the technology’s potential to help stem HIV. McDevitt and Walker’s team at Massachusetts General Hospital developed a test for HIV detection using McDevitt’s chip, but later realized it would be better used to test CD4 counts to help manage the disease.

“We were excited about (the first test) for about 10 minutes, then we began to ask the real question: How can we really impact this problem?” McDevitt said.

The team tested a much larger version of the device in Botswana in February and March 2003 with a grant from the National Institutes of Health. Twenty organizations, including the Gates and Duke foundations, have contributed $18.8 million to help develop the device.

Last November, Hawkins, who had been an adviser to various UT departments, met McDevitt by chance.

The university had been looking for another company to commercialize the technology, and Hawkins, 55, was ready to break out of a four-year retirement.

Hawkins founded, then sold, three drug testing or development companies, including Pharmaco Dynamics Research Inc. He was the kind of person UT was looking for.

“Easily dozens of people looked at” the technology, said Neil Iscoe, director of UT’s Office of Technology Commercialization. To turn the idea into a company “is a big job requiring lots of capital and energy.”

Hawkins’ first big test was working out a licensing agreement between the company, UT and Massachusetts General, which holds one joint patent with UT for the CD4 test.

After seven months of work, the agreement recently was completed. The next step is to secure investment backing for LabNow, which is operating temporarily out of Hawkins’ West Austin house. He is paying the costs for now.

Hawkins said the funding could be completed by the end of July.

“We’ve been very careful about who we choose as investors, because this first application is a pretty unusual one,” said Hawkins.

Hawkins will be a part-owner of the company, which will pay UT royalties. McDevitt will be an adviser to the company.

Bob Davis, LabNow’s vice president of clinical development, estimates that the model could be ready to test in a year. The company is looking for a manufacturing partner, he said.

The conference in Bangkok will help Hawkins and McDevitt drum up business from governments of developing countries. Companies with workers in AIDS-stricken regions also could be potential buyers, Hawkins said.

“Planets really aligned nicely,” McDevitt said. “When you think about it, something’s coming out of the university, and it’s going into one of the biggest humanitarian problems on the planet.”

UT and Massachussetts General have agreed to waive their royalties on sales of the device in developing countries, but not in the United States and Europe.

UT will also see a big payoff when LabNow creates other diagnostic tests, making the device more profitable in the United States. McDevitt has developed about a dozen tests, including one that tests for a person’s likelihood to develop heart disease.