The legendary stories in Edmonton’s medical research circles are about the ones that got away.

The breast cancer vaccine drug Biomira, Isotechnika’s anti-rejection drug, BioMS Medical’s promising cure for multiple sclerosis: All were products of the fertile minds of University of Alberta medical researchers.  All came close to the brass ring. As publicly traded companies, billions of dollars were raised and billions lost.

But none passed the toughest test of all – those last major tests on human beings required by regulators to prove, beyond a shadow of a doubt, that the new drugs did what they are supposed to do without adverse side-effects. Promising drugs that didn’t pass their clinical trials litter the road to success. The winners are far and few between.

Meanwhile, there was a little engine here in Edmonton that could.

Medical research company KMT Hepatech just celebrated its fifteenth anniversary by moving off University of Alberta property into its own facility in the Edmonton Research Park.

While the general public is captivated by the high-risk/high-reward nature of the drug research game – especially when shares could be bought – KMT Hepatech quietly went about its business, offering a made-in-Edmonton solution to a previously intractable medical research problem.

Economic development, in the 21st Century, often turns to “knowledge-based” new industry or industrial improvements. KMT Hepatech was founded on new knowledge. KMT Hepatech’s revenue stream depends on new knowledge coming from that original new knowledge.

001Fifteen years ago, two well-known University of Alberta medical researchers, liver transplant specialist Dr. Norman Kneteman and virologist Dr. Lorne Tyrrell, teamed up with then PhD candidate David Mercer.  Through genetics and transplant techniques, the team were the first in the world to create mice with “humanized” livers for research purposes.

It doesn’t sound earth-shaking, not like a new drug that could prevent cancer.

But these were the only laboratory animals in the world, other than chimpanzees, on which human liver diseases could be studied, on which potential cures could be tested and refined, making the treatments safe enough and reliable enough to finally be tested in human beings.

For its first 15 years, KMT Hepatech had a captive market. The KMT Mouse was the only animal model on which cures for Hepatitis C could be studied. Researchers came from around the world to either the Edmonton based company or to an associated Japanese bio-research company that had licensed KMT Hepatech’s technology. The modified mice are medically fragile and do not travel well.

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The privately held KMT Hepatech is not a big company. But it has consistently earned income, employed PhDs, paid shareholder dividends, and paid back research funding. It may not have earned millions of windfall dollars for investors, but it did not reduce millions of investor dollars to nothing. Slow and steady has won this particular race.

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Dr. Norman Kneteman and Dr. Lorne Tyrrell holding KMT’s 2012 ASTECH Foundation Award.

Its scientific and commercial achievements have been recognized. KMT Hepatech was named the 2011 Company of the Year by BioAlberta and was named the 2012 ASTECH Foundation winner for Outstanding Commercial Achievement in Alberta Science & Technology.

TEC Edmonton has long worked with KMT Hepatech as a business adviser, especially during the company’s start and currently as KMT Hepatech plans for the future.

Today, KMT Hepatech is at a crossroad. Thanks to research done on the KMT mouse, drugs that cure Hepatitis C are now on the market. “We were too successful,” chuckles Dr. Kneteman, President and CEO of KMT Hepatech. “We worked ourselves out of a job!”

There’s other research uses for the KMT mouse and its humanized liver, such as finding a cure for Hepatitis B. Dr. Tyrrell originally formulated a treatment that suppresses Hepatitis B. But the disease will return in over 300 million people if the treatment is stopped.

Another big, medical-research market is the study of drugs under development and their possible ill-effects on the human liver … or the KMT mouse’s humanized liver.

“If the KMT mouse can determine toxicity before the millions of dollars needed for human trials,” says Dr. Kneteman, “we’ll have a market.”

But other competing animal models have now been developed for liver toxicity studies by other companies and research groups.

“It would change our business model,” Dr. Kneteman says. “We are not experts in toxicity, so we’d need to partner up with research companies with toxicity expertise.

“KMT Hepatech would have to produce thousands more modified mice than we do at present.  However, we know that we are more cost-efficient than our competitors at producing the actual test animals.”

There you go. A classic business conundrum. Change, transform and grow. Or die.

TEC Edmonton is honoured to be assisting KMT Hepatech in taking on the market research needed to determine its future direction.

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KMT management team (from L to R): Dr. Norman Kneteman, President and CEO — Kaz Fortuna, Vice-President, Operations — Verity Olson, Animal Production and Operations Manager — Dr. Garry Lund, Director, Project Management — Dr. Svetlana Sapelnikova, Director, Marketing and Business Development