Britain fearful of Pfizer future, UCB on the hunt for antibody partners, Novartis snubs Transgene

Welcome to the latest edition of our weekly EuroBiotech Report. British trade unions and politicians spent the week calling for guarantees that Pfizer ($PFE) won't perform its now-traditional post-takeover cuts in the event it succeeds in its pursuit of AstraZeneca ($AZN). Whether they actually have the power to stop Pfizer is questionable, though. Ireland is also starting to worry that its business-friendly taxes aren't attracting the sort of job-creating biopharma companies it wants. UCB (EBR:UCB) is doing its bit for British R&D by inviting biotechs and other researchers to collaborate at its upgraded antibody discovery lab. Transgene (EPA:TNG) is searching for a new partner after Novartis ($NVS), fresh from adding GlaxoSmithKline's ($GSK) oncology assets, backed away from a lung cancer deal. ALS patients are trying to set up a €100 million ($139 million) disease-specific venture fund. And more. Nick Taylor (email | Twitter)

1. Pfizer's pursuit of AstraZeneca has U.K. workers worried
2. Novartis snubs Transgene after buying GSK's oncology assets
3. Ireland building plants to attract biopharma as tax policy doubts mount
4. 
UCB invites biotechs, academia to U.K. antibody collaboration
5. ALS patients plan €100M investment fund

And more >>

Pfizer's pursuit of AstraZeneca has U.K. workers worried

Since coming to power in 2010, the Conservatives have tweaked taxes to make the United Kingdom more attractive to local and overseas businesses. Now Pfizer's ($PFE) pursuit of AstraZeneca ($AZN) is validating the strategy, but has also raised questions about its long-term, unintended consequences. If British biopharma is shaky now, what state will it be in by the time Pfizer is done with AstraZeneca?

This question has agitated trade unions and politicians this week, with fresh memories of Pfizer's exit from Sandwich tainting many people's view of the company. And with AstraZeneca in the middle of setting up its new site in Cambridge, a trade union has called for a "bankable commitment" that Pfizer will build, occupy and operate the facility. Another trade union and the Labour political party have also called for guarantees that Pfizer will retain jobs and R&D capacity while also making long-term investments in the country. Pfizer's record of slashing 50,000 jobs after buying Wyeth is cause for concern.

Pfizer CEO Ian Read

Comments by the ruling political party--which is traditionally more business-friendly than Labour--have been more muted, with a spokesperson for the prime minister sidestepping The Guardian's questions about possible job cuts. Pfizer has already spoken to the government, but--publicly at least--is saying it needs to talk to AstraZeneca before making any decisions. "For us to be able to say what we need to do with the franchises and where we would find synergies, we would first of all have to sit down and work with AstraZeneca," Pfizer CEO Ian Read told analysts on a conference call.

Read has so far declined to make firm commitments about U.K. jobs, and even if he did some would still have doubts. When Kraft bought Cadbury in 2010 it said it would keep a Bristol factory open. The next week it said it planned to close the site, leaving 400 people out of work and prompting a trade union to accuse Kraft of having "deliberately misled" staff. News of the Kraft closure came days after Pfizer revealed it was pulling out of its Sandwich R&D site, putting 2,400 jobs at risk. After a backlash, Pfizer decided to keep 650 staff at Sandwich. - read the trade union and Labour comments, Pfizer transcript and Guardian blog

Back to top

Novartis snubs Transgene after buying GSK's oncology assets

The first possible fallout from last week's asset swap between GlaxoSmithKline ($GSK) and Novartis ($NVS) hit European biotech this week, with the Swiss pharma backing out of a proposed deal with French biotech Transgene (EPA:TNG). And while the exact reasons for the move are unclear, the consequences are certain: Transgene needs a new partner for Phase III.

Transgene CEO Philippe Archinard

Novartis paid $10 million (€7.2 million) for an option to license Transgene's lung cancer drug in 2010 but has now walked away from a deal that would have cost it up to €700 million in milestones. The move leaves Transgene on the cusp of Phase III without a partner. Transgene raised €45.5 million this year to fund the Phase III trial and other activities but still wants a partner for late-phase development. "We will be talking to more parties. We know who to talk to, and we will initiate these calls as of tomorrow," Transgene CEO Philippe Archinard told Bloomberg on Monday.

Archinard was unsure whether Novartis' deal with GlaxoSmithKline--which will give it access to multiple oncology products and pipeline candidates--factored into the decision. The timing was tied to Transgene's release of Phase IIb data, with the option agreement giving Novartis 90 days from the date it saw the results to make a decision. When the deal was agreed in 2010, Transgene expected to have the data early in 2012, but the start of the study was delayed by companion diagnostic development.

Transgene published the data in January. While the study missed its primary endpoint, the validation of the biomarker and outcomes in certain subgroups were sufficiently encouraging for Transgene to start work on Phase III. In parallel Transgene must also search for a new partner. "It will be hard to find another partner for the product," Pharmium Securities analyst Frederic Gomez said. Gomez expected Transgene shares to sink 30% following the news. The stock closed down 15% on Monday. - read the Bloomberg article

Back to top

Ireland building plants to attract biopharma as tax policy doubts mount

The Irish government is funding the construction of two 25,000-square-foot manufacturing facilities to attract foreign biopharma companies to the country. Government agency IDA is committing €8 million ($11 million) to the project to grow the Irish biopharma sector during a time in which its light-touch tax model is facing criticism.

While its biopharma manufacturing sector has taken a few hits in recent years, Ireland continues to attract multinational drugmakers, with Endo ($ENDP), Perrigo ($PRGO) and Horizon Pharma ($HZNP) all inking deals to set up shop in the country over the past year. Each was attracted by Ireland's low corporate tax rate of 12.5%, an economic policy that helped build the country's drug industry. Yet there are growing worries about whether companies attracted by the tax regime are actually creating jobs or helping the economy.

The government is looking into the issue. "In relation to transactions that may not involve real substance in terms of jobs and investment in the Irish economy, the [ministry] has concerns and is examining ways to discourage such transactions without damaging legitimate business activity," a government spokesperson told the Financial Times. At this stage it is unclear how Ireland will test whether a deal has "real substance" and what it can do to stop such transactions.

Doing more to attract the sort of business Ireland wants is one strategy. The two government-funded plants are part of this approach, with IDA telling the Irish Independent it is making the investment in response to feedback from life sciences companies. Construction of such plants effectively stopped when the Irish property market collapsed, leaving drugmakers that want to manufacture products in the country having to choose between taking over an old plant or building their own.

The challenge now is to find tenants for the proposed plants. "It will be hugely helpful to have a ready-made facility available to show companies, but what we really need is to actually get the companies here in the first place. The more visits you have, the greater chance of success," local Irish commerce chief Nick Donnelly told the Independent. - here's the FT feature and Independent news

Back to top

UCB invites biotechs, academia to U.K. antibody collaboration

Belgian biopharma UCB (EBR:UCB) wants to collaborate with outside researchers at its recently upgraded antibody discovery lab in the United Kingdom. Anyone working on a target that is accessible to modulation by antibodies is invited to apply to the program, which is now accepting submissions for its first wave of projects.

UCB spent $5.5 million (€4.0 million) to automate antibody discovery at the facility through the use of robotics. And having completed the work, the company is inviting proposals from biotechs and other research groups that want to use the equipment. The infrastructure investment and collaboration plan are part of UCB's efforts to keep its pipeline stocked with antibodies. Cimzia, which first won approval from FDA for Crohn's disease in 2008, brought in sales of €594 million ($820 million) last year, and UCB is hunting for other antibodies to replicate the success.

The company has multiple antibody-based drugs--including Cimzia in new indications--in clinical trials. And in July it bought the right to develop antibodies from Germany-based Wilex's portfolio in indications other than oncology. The current crop of clinical candidates target lupus, osteoporosis, arthritis and other diseases. In an email to FierceBiotech, UCB VP of biology Dr. Gillian Burgess highlighted inflammation, autoimmunity, central nervous system disorders, fibrosis and metabolic diseases as potential areas of focus for the collaborations.

UCB is accepting applications for the first round of collaborations until September 1. The submission window for each subsequent round will last four months, with the number of collaborations entered into depending, in part, on the scope and success of the proposals. UCB is also taking a flexible approach to the structure of the collaborations. "IP ownership will be determined on a case-by-case basis that rewards and recognizes the contribution of organisations involved in the project," Burgess said. - here's the UCB release

Back to top

ALS patients plan €100M investment fund

The team behind a large-scale genetic research project into amyotrophic lateral sclerosis (ALS) are trying to set up a €100 million ($139 million) investment fund to finance research into new therapies. And the founders' motivation goes beyond financial gain, with the three of them each having ALS.

Management consultancy Accenture ($ACN) has signed up to sponsor the fund and will host a gathering of potential investors in Amsterdam later this month. The founder of PatientsLikeMe, former CEO of Crucell and the chairman of the Dutch ALS association are lined up to talk at the event, which is part of the fund's attempts to gather the cash it needs to realize its ambitions. Armed with the cash and their links to the ALS research community, the founders hope to advance two drugs to Phase III and take one all the way to market.

Robbert Jan Stuit

Bernard Muller and Robbert Jan Stuit officially founded their ALS genetic research initiative, Project MinE, in June and sent the first 300 DNA samples to Illumina ($ILMN) for sequencing the next month. The long-term goal is to sequence the genomes of 15,000 ALS patients. If successful, Project MinE will suggest new ways of treating ALS. Its founders have now teamed up with Garmt van Soest to create a vehicle to finance the advance of these scientific breakthroughs into clinical candidates.

The team is hoping to attract impact investors--typically people who commit cash to projects designed to cause social or environmental improvements while also making money. Taking this strategy could bring in cash from outside the traditional pool of biotech investors and help the group hit its ambitious targets. In the past 6 months Edmond de Rothschild Investment Partners and Seventure Partners have successfully set up €100 million-plus European life science funds, but both have a broader scope than the ALS project. - read the release

Back to top

Of Note:

Belgian newspaper De Standaard reports that local biotechs Argen-X and Promethera Biosciences are planning IPOs. Antibody developer Argen-X is closer to filing, with Promethera weighing whether to test public investor interest in its stem cell technology in the second half of the year. European biotech stocks have tumbled alongside their U.S. peers--the Euronext index fell 9% over the past month--but enthusiasm for IPOs remains. The Euronext biotech index is still up 30% this year. Argen-X | Promethera (Dutch)

Sequana Medical raised CHF 23 million ($26 million) in a Series C round the Financial Times described as a vindication of its decision to join the exodus of U.S. medical device startups to Europe. The moves across the Atlantic are reportedly motivated by Europe's more liberal regulations, which shorten time to market and therefore make the companies more attractive to investors. Sequana Medical CEO Noel Johnson told the paper: "The European VC community has been very supportive in providing funding." FT

The FDA cleared Israeli biotech BrainStorm Cell Therapeutics to take its stem cell amyotrophic lateral sclerosis candidate into Phase II. The trial will start at Massachusetts General Hospital, with the stem cell manipulation taking place in cleanrooms at the nearby Dana-Farber Cancer Institute. Data from an early stage trial were presented last year, prompting BrainStorm to start moving the therapy into a 48-person Phase II study. Reuters

Oxford BioMedica (LSE:OXB) regained the rights to its wet age-related macular degeneration candidate after Sanofi ($SNY) decided not to continue developing the drug beyond Phase I. Sanofi's decision was attributed to pipeline prioritization, and Oxford BioMedica is confident of finding another partner once it has Phase I data. The British biotech claims that large biopharma companies and financial investors have previously shown an interest in the drug. Release

Paris-based Enterome Bioscience raised €10 million ($13.9 million) in a Series B round to fund research into its gut microbiome technology. Enterome is currently focused on development of biomarkers and companion diagnostics for inflammatory bowel and metabolic disorders, but plans to expand into therapeutics. On the other side of Paris, Voluntis celebrated bringing in €20.75 million to develop its diabetes management system and expand in the U.S. Enterome I Voluntis

Back to top

Read previous editions of the EuroBiotech Report here.