Roche ($RHHBY) has turned to its incubation partners at Versant Venture's Inception Sciences to create a virtual biotech which will set out to spawn new therapies that can repair the damaged nerves of patients with multiple sclerosis.
Following a popular model for drug R&D set up by several venture groups over the last few years, Roche will fund the work done by the virtual team at Inception 5, with Versant bankrolling the equity investments needed and Roche paying the research tab. Any small molecules that promise to spur remyelination--protecting the damaged nerve sheaths associated with MS--can be snapped up by Roche under an option arrangement.
The deal follows up on a similar pact the pharma giant set up on Inception 3 back in the fall of 2012 for hearing loss. Inception is run by Amira co-founder Peppi Prasit. His team will pursue small molecules for remyelination, a strategy for repairing the nerve damage caused by MS that has been attracting some attention recently. Acorda and Biogen Idec ($BIIB) are both at work in this field and clinicaltrials.gov lists several ongoing studies related to remyelination.
Unlike some of the other majors, Roche is still very active in the neuroscience field, with a dozen neuroscience programs in the pipeline under Luca Santarelli.
Versant was early to this kind of build-and-sell R&D game with Roche. But it's not alone. GlaxoSmithKline set up a package deal for new biotech construction with Avalon Ventures back in the spring of 2013, fueling work on 10 or so portfolio projects with an option to buy the most promising. Index and Atlas have been doing similar startup deals of their own. For the VCs, the portfolio approach offers a way to turn their R&D expertise and industry contacts into relatively quick profits for their investors. For the pharmas involved, it's a chance to back some cutting edge research at an external organization without being on the hook for huge amounts of cash.
"With Inception 5, we look forward to further unraveling the biological basis of nerve myelination and target-repair mechanisms in multiple sclerosis," noted Santarelli. "To tap into an area that has recently seen significant advances, we will partner with world-class scientists, entrepreneurs and investors in the context of our newly established model for externalized drug discovery."
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