Welcome to the latest edition of our weekly EuroBiotech Report. The arguments over global tax arrangements that have been bubbling away for months came to a head in dramatic fashion this week. AbbVie ($ABBV) showed that efforts to clamp down on inversions are having an effect, while Ireland committed to closing the door on the "Double Irish" tax scheme. Companies already benefiting from the tax break have until 2020 to make new arrangements, though. Back in the drug development trenches, companies got on with the business of raising and handing out cash. Imperial Innovations (AIM:IVO) laid out the investment strategy for its £191.5 million ($306.0 million) cash reserve, a pair of German biotechs snagged €15.4 million and Probiodrug set its sights on a €32 million IPO. A European consortium began spending some of its €6 million grant on a trial of a personalized brain cancer vaccine. And more. Nick Taylor (email | Twitter)
1. Ireland to call time on 'Double Irish' tax break in 2020
2. Imperial Innovations lays out investment plans for £191M pool of cash
3. German biotechs bag €15M to spin out immuno-R&D programs
4. Probiodrug sets sights on €32M IPO to finance Alzheimer's R&D
5. EU consortium moves NGS-enabled cancer vax into clinic
And more >>
Ireland to call time on 'Double Irish' tax break in 2020
The "Double Irish" tax break that lured drugmakers to the Emerald Isle is going, but not yet gone. In the face of pressures from European authorities to close the tax break and from companies to keep it open, Ireland has settled on a compromise that allows companies already benefiting from the scheme to continue doing so until the end of 2020.
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| Irish Finance Minister Michael Noonan |
In the days before Irish Finance Minister Michael Noonan finalized the policy, multinational pharma companies lobbied the government to keep the tax scheme open for as long as possible, The Irish Times reports. Late last week reports suggested Ireland planned to phase the tax break out over the next four years, a time frame that pharma companies viewed as too short. The industry argued that it needed a longer phaseout to avoid the disruption of tax arrangements that are tied to the life cycles of products.
Noonan has given companies slightly longer than the four-year phaseout that was initially proposed, but less than the seven years some in the industry wanted. The deadline for new users of the scheme--which involves moving money around the world as tax-deductible royalty payments--is January 1, 2015. Companies that already have the structure in place have until the end of 2020 to make alternative arrangements. Ireland is blocking the scheme by classing companies registered in the country as tax residents.
It is too early to tell how companies will respond to the end of the tax break, but nobody--least of all Ireland--expects them to stop moving money around the world to lower their rates. "This proactive change will not bring an end to international tax planning. We are giving certainty to investors about corporate tax in Ireland for the next decade," the Irish Independent reports Noonan as having said. Ireland has also taken steps to make itself more attractive to global companies. The corporate tax rate is staying at 12.5%, and the country is introducing a patent box like the United Kingdom. - read the coverage of the Times, Independent, Bloomberg and a Forbes contributor
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Imperial Innovations lays out investment plans for £191M pool of cash
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| Imperial Innovations CEO Russ Cummings--Courtesy of Imperial Innovations |
Imperial Innovations (AIM:IVO) has capped off a year in which four of its portfolio companies pulled off IPOs and it raised £150 million ($239 million) with financial results that drove an uptick in its stock. The challenge now is to find and fund the next crop of Circassias (LON:CIR) and Abzenas (AIM:ABZA).
Having raised £150 million earlier in the year, Imperial Innovations is now sitting on £191.5 million in cash, more than twice as much as it had at the end of 2013. But while the sums have gotten bigger, the London, England-based investment group is sticking to the blueprint that delivered its successes in 2014. Instead of using its increased resources to go after new, late-stage opportunities, the company plans to back existing portfolio businesses that it thinks are on the cusp of something big.
"We've identified specific companies in our portfolio that we think are ready to scale," Imperial Innovations CEO Russ Cummings told FierceBiotech. None of these businesses are surefire successes, but having helped them from early in their history, Imperial Innovations should have a decent grasp on their strengths and weaknesses. "We know these businesses, warts and all," Cummings said. The clutch of leading portfolio companies plan to collectively raise £100 million in the coming 12 months.
Imperial Innovations is in a position to play a major role in these financings, while also adding new startups to its portfolio. Again, the plan with new investments is to scale by value, not volume. The company added 6 startups to its accelerated-growth portfolio last year. And while Cummings thinks the figure might increase to 8 to 10 in the future, the main goal is to take a bigger stake in the most promising opportunities. Instead of 30% stakes, the company may edge closer to 50%.
The depth-over-breadth approach puts Imperial Innovations in line for big paydays if any of the new investments make successful exits, while also freeing it from the need to scale up its own operation. - read the results
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German biotechs bag €15M to spin out immuno-R&D programs
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| Rigontec CEO Annegret de Baey-Diepolder |
A pair of German biotechs have raised €15.4 million ($19.5 million) to get started as independent companies. Rigontec accounted for the bulk of the money, raising €9.45 million from Wellington Partners and Boehringer Ingelheim Venture Fund to advance its RNA-based immunotherapeutics.
Gunther Hartmann and Veit Hornung have worked on the underlying science at the University of Bonn for almost a decade, culminating in the creation of Rigontec in January to move a candidate into the clinic. The lead candidate is ImOl100, a chemically synthesized mimic of the ligand of retinoic acid inducible gene I (RIG-I). Hartmann and Hornung have linked the activation of RIG-I to the destruction of diseased cells and lasting immunity, events Rigontec hopes to trigger with its synthetic ligands.
"Rigontec has a truly different approach to cancer immunotherapy based on ground-breaking science in the up-and-coming field of RNA sensing. This forms a solid basis for developing medicines which may allow for both near-term efficacy and also potentially long-term protection," Wellington Partners' Regina Hodits said in a statement. Melanoma and prostate cancer are among the indications being considered for further development of ImOl100.
The other German biotech to raise money this week, ImevaX, is also the product of an academic center. ImevaX spun out of the Technische Universität München earlier this year to develop a pipeline of drugs designed to stop infectious diseases from downregulating the immune system. The lead candidate, IMX 101, is an inactivated form of a molecule that Helicobacter pylori is thought to use to stop the immune system. The German government has given €5.9 million to ImevaX. - read the releases from Rigontec and ImevaX
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Probiodrug sets sights on €32M IPO to finance Alzheimer's R&D
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| Probiodrug CEO Dr. Konrad Glund |
Probiodrug has set its sights on raising €32 million ($41 million) to fund its Alzheimer's R&D program when it goes public in Amsterdam, the Netherlands, later this month. BB Biotech (SWX:BION), Biogen Idec ($BIIB) and other existing investors are expected to buy almost half of the allocated shares.
Halle, Germany-based Probiodrug said the investors that have financed it so far have committed to buying €15 million worth of shares, putting it well on its way to hitting its fundraising goal. Probiodrug expects to start trading on the stock exchange on Oct. 27, at which time it will begin putting the cash injection to work on its R&D programs. A Phase IIa monotherapy trial of Probiodrug's lead candidate, PQ912, in early Alzheimer's patients tops the agenda.
Probiodrug will also funnel some of the cash into two of its preclinical candidates, but a lot is resting on the success of PQ912 as it gets closer to the stage of development at which many previous Alzheimer's drugs have failed. PQ912 has a different mechanism of action than Alzheimer's drugs that have failed in the past. The treatment is a specific inhibitor of glutaminyl cyclase, an enzyme that when overexpressed in mice has been linked to development of Alzheimer's.
Having come through a Phase I trial unscathed, PQ912 is now set to enter Phase IIa. Probiodrug expects to begin treating patients in the first quarter of 2015 and have initial data by mid-2016. The timeline puts Probiodrug a long way from market in a notoriously difficult indication that some pharma companies have shied away from in recent years, but its novel approach and relatively small fundraising target could help it pull off its IPO. - read Reuters' coverage
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EU consortium moves NGS-enabled cancer vax into clinic
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| University of Heidelberg's Dr. Wolfgang Wick |
A European consortium including BioNTech and immatics biotechnologies has moved its personalized therapeutic brain cancer vaccine project into the clinic. The European Union is bankrolling the Phase I/II study with a €6 million ($7.6 million) grant.
Authorities in Germany have signed off on the trial, clearing the way for BioNTech and immatics to start recruiting patients with glioblastoma in the country. Once the 30 patients enrolled in the trial have been through surgery and initial radio-chemotherapy, they will receive two experimental, personalized vaccines alongside the standard chemotherapy treatment.
One of the vaccines will be created from a pool of 70 peptides, with researchers deciding the exact composition based on each individual's cancer tissue and predicted immune response. Researchers will design the other vaccine in light of data from next-generation sequencing (NGS) of each patient. The University of Tübingen will produce the peptides for the second vaccine to order.
Hospitals associated with the universities of Tübingen and Heidelberg are recruiting patients into the trial, which is the result of work by the European Glioma Actively Personalized Vaccine Consortium. GAPVAC was set up in 2013 to advance fully personalized vaccines, a class the organizers think could improve outcomes in some hard-to-treat cancers.
"The trial concept is exactly the right combination of exceptional science and a rigorous protocol for a disease for which over-simplified strategies have failed in the past," the University of Heidelberg's Dr. Wolfgang Wick said in a statement. However, cancer vaccines have crashed and burned in trials in the past, and the personalized, NGS-based method could be tough to commercialize. - read the release
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The Wellcome Trust began looking for a replacement for its chairman. Sir William Castell is due to leave the post in 2016, by which time the nonprofit hopes to have a successor in place to help manage its £17 billion ($27 billion) investment portfolio. FT (sub. req.)
Bicycle Therapeutics raised £20 million ($32 million) from a clutch of big-name investors to develop its bicycle peptide drug conjugates. Sir Greg Winter--of Cambridge Antibody Technology fame--is one of the company's scientific founders. FierceBiotech
The German Center for Cancer Research struck a deal to test Imaxio's IMX313 in combination with one of its vaccines. If IMX313 boosts the efficacy of the vaccine, the center has the option to further develop the candidate. Release
Karolinska Development (STO:KDEV) named Bruno Lucidi as its new CEO. Lucidi has previously worked at Bristol-Myers Squibb ($BMY), Johnson & Johnson ($JNJ) and GlaxoSmithKline ($GSK). Release
AstraZeneca ($AZN) struck four new collaborations with the University of Cambridge to deepen its ties to the city it has put at the center of its R&D plans. FierceBiotech
Mologen presented an early look at a new class of immunoactivating TLR-9 agonists. In preclinical tests the class--dubbed EnanDIM by Mologen--induced broad immune activation. Release
Forward Pharma ($FWP) pulled off a $221 million (€173 million) IPO. The listing gives the Danish drug developer the funds to take on Biogen Idec ($BIIB) in the multiple sclerosis market. FierceBiotech
The CEO of Oryzon Genomics said the opening of its office in Cambridge, MA, could eventually lead to the company relocating its global headquarters to the city. A nearer-term goal is to grow the head count at the Kendall Square office to 10. BBJ
GW Pharmaceuticals' ($GWPH) candidate for treating ulcerative colitis missed its primary endpoint in a Phase II trial. The drug failed to outperform placebo and 41% of patients in the treatment arm dropped out due to side effects. FierceBiotech
Ipsen (EPA:IPN) applied to extend the label for Decapeptyl after a Phase III trial found prostate cancer patients responded to subcutaneous administration of the drug. Decapeptyl is currently administered intramuscularly. Release
Prosensa ($RNA) began a NDA submission for its Duchenne muscular dystrophy candidate. The plan is to have the filing finished by the end of the year, putting FDA on track to make a final decision by mid-2015. FierceBiotech
Woodford Investment Management made a $50 million (€40 million) investment in San Diego, CA-based Cosmederm Bioscience. Cosmederm has a pipeline of pain management products. Release
Smith & Nephew's ($SNN) spray-on cell therapy failed a Phase III trial. The London, England-based medtech company is running a second Phase III trial of the drug, data from which are expected in 2016. FierceBiotech
MorphoSys (ETR:MOR) bought Lanthio Pharma's lanthipeptide technology for an undisclosed fee. The German biotech will use the technology in its drug discovery program. Release
A subsidiary of Wilex (ETR:WL6) struck a €52 million ($66 million) deal with Roche ($RHHBY). The agreement gives Roche exclusive rights to a tumor target in return for up to €52 million, some of which Wilex will receive immediately. Wilex's stock jumped as much as 37% on the back of the rare piece of good news. FierceBiotech
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