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Legitimizing license
January 2007
by Chris Anderson  |  Email the author


SAVANNAH, Ga.—Health Disocvery Corp. announced in early December that it had granted a non-exclsuive license for the use of its pattern recognition technology to Pfizer Inc. for use in its R&D activities worldwide. Included under the license is access to HDC's support vector machine (SVM) and Fractal Genomic Modeling (FGM) technology data analysis tools. While specifc financial terms of the deal were not released, nor were details of the exact use of the SVM and FGM tools to Pfizer, the deal, nonetheless, promised to put wind in HDC's sails as it looks to aggressively defend its SVM and other related patents and establish itself as a research organization also dedicated to its own internal discovery programs. "This license is a significant step forward for HDC as we look to license our SVM and related patents," says Steven Barnhill, chairman and CEO of Health Discovery Corp. "Pfizer is the third licensee in for us in the past four months. The recent deal shows our program is gaining momentum and is further proof of the commercial viability of the SVM technology." The other two recent licensees of the SVM technology are Epigenomics who is using it for DNA methylation analysis and tool maker Bruker Daltonics which has integrated it into its ClinProTools line of clinical proteomic tools. For HDC, the growing revenue stream from license deals comes in the wake of its activity over the past three years to aggregate SVM and other related patents. In all, the company currently holds 17 related patents and, according to Barnhill, has applied for more than 40 others. Dr. Herbert A. Fritsche, Jr. preofessor of laboratory medicine at M.D. Anderson Cancer Center at the University of Texas and a member of HDC's Science Board says, "In my opinion, HDC's pattern recognition technology can be an important tool for the discovery of new drug targets such as proteins, genes or other molecules that a drug is intended to affect. [It] might also be helpful in possible identification of new biomarkers to assess both efficacy and toxic response to new drugs." While Barnhill was not at liberty to discuss specifics of the Pfizer deal, he does believe SVM has significant potential in the area of toxicology studies, a point further highlighted by a March 2004 cooperative study by a half dozen pharma heavyweights, among them Abbott, Novartis and Pfizer that showed SVM as a powerful and viable tool for toxicity studies. While HDC will continue to pursue its licensing strategy—Barnhill estimates there are "hundreds" of companies currently using it who may not know it is patented technology—he is quick to point out that HDC's strategy is not "to be a patent troll." "We have our own internal discovery programs aimed at biomarker discovery including biomarkers for prostate cancer that we hope will allow us to partner with a company to develop new diagnostic tools," he says. In fact, for its internal discovery programs, Barnhill sees most of the opportunity in the diagnostics arena. The opportunity here is great, he notes, based on the FDA's new mandate of the development of companion diagnostics. HDC also intends to exploit SVM for use as a breast cancer diagnostic. Under this model, mammography images could be sent securely via the Internet to HDC where its diagnostic tool could automatically read the image and determine with much greater accuracy than other mammography readings, if cancer was present. "There is already reimbursement for CAD reading and we could deliver results to doctors within seconds of their submission," says Barnhill. "That alone is a potential $180 million market." Meanwhile, the company will continue to assert its rights to SVM and look to expand its licensing base over the coming years. HDC's business model calls for this revenue stream to help fund the company's ongoing internal research and development activities.  
Code: E010706



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