Welcome to the latest edition of our weekly EuroBiotech Report. Away from the increasingly ugly row over the merits of Pfizer's ($PFE) pursuit of AstraZeneca ($AZN), other Big Pharma and biotechs across Europe tried to move R&D beyond the failed models of the past. In London, two miles north of where AstraZeneca and Pfizer's CEOs were fending off politicians' questions, Johnson & Johnson ($JNJ) was discussing its less flashy, more targeted way of tapping into British science. The office inked 16 deals with European biotechs and academic centers last year. In Germany, Bayer is inviting biotechs into its home, with three startups now housed at its new incubator. AstraZeneca is leaving its former home in Alderley Park, but is chipping in cash to fund the creation of biotechs to take its place. Some of the current crop of clinical-phase companies posted data, with Da Volterra advancing its counterpunch to antibiotic resistance and Santhera being boosted by late-stage Duchenne muscular dystrophy data. And more. Nick Taylor (email | Twitter)
1. While Pfizer faces pols in Westminster, J&J taps U.K. science across the city
2. AstraZeneca backs fund to find biotechs for Alderley Park
3. Bayer mirrors Mission Bay with startup incubator in Berlin
4. Da Volterra's answer to antibiotic resistance passes first clinical test
5. Santhera stock jumps after DMD drug meets endpoint in PhIII
And more >>
While Pfizer faces pols in Westminster, J&J taps U.K. science across the city
When news of Pfizer's ($PFE) move to buy AstraZeneca ($AZN) first emerged last month, observers were quick to tally up how many biotech assets $100 billion (€73 billion) would buy. This week Pfizer CEO Ian Read straight-facedly lauded the R&D benefits of the deal to politicians, while across London, Johnson & Johnson ($JNJ) continued its quieter, more targeted approach to tapping British science.
J&J set up the London office last year and tasked its two dozen employees with establishing links to European researchers and inking early-stage deals. Reuters reports 16 such agreements were signed with biotechs and academic institutes across Europe last year. The team has more autonomy than Big Pharma drug hunters typically enjoy, with the head office only needing to be consulted if the therapeutic candidate has already advanced beyond proof-of-concept.
 |
| Navid Malik--Courtesy of Cenkos |
While Pfizer is also trying to access expertise in academia--this week it inked a rare disease deal with a handful of British universities--the disconnect between the AstraZeneca offer and current accepted wisdom on R&D struck analysts. "Pharma companies need to spend fewer biodollars internally and externalize more, yet Pfizer seem to be arguing they can succeed by pooling more intellectual capital in-house," Navid Malik, head of life sciences research at Cenkos Securities, told Reuters.
Pfizer's R&D chief, Mikael Dolsten, has been talking up the benefits of combining with AstraZeneca to politicians and scientists in the United Kingdom. Dolsten made his charm offensive amid an increasingly ugly debate, in which AstraZeneca CEO Pascal Soriot warned the deal could cost lives, Read rubbished the claims and a Labour politician set a new low for the saga by comparing the proposed takeover to rape. - here's the Reuters article, Read-Soriot squabble and politician's comment
Back to top
AstraZeneca backs fund to find biotechs for Alderley Park
AstraZeneca ($AZN) is setting aside £5 million ($8.4 million) to fund startups at the Alderley Edge site it is vacating as part of its relocation to Cambridge. And with the site's new owner chipping in a further £5 million--and seeking an additional £30 million from other investors--a financial platform is in place to fill space left by AstraZeneca with a string of biotechs.
 |
| AstraZeneca's Alderley Park R&D site--Courtesy of AstraZeneca |
Manchester Science Parks (MSP), which runs several sites in and around the city in northern England, bought the Alderley Edge campus from AstraZeneca in a deal reported to be worth upward of £30 million. Having made the acquisition, MSP is now working to find tenants. AstraZeneca is keeping 700 staffers at the site, but the campus used to accommodate around 3,000 workers. MSP plans to make up the shortfall by leasing space to startups and is setting up a fund to help finance companies.
As happened when Pfizer ($PFE) cut back the headcount at its Sandwich site and Merck KGaA laid off staff in Switzerland, former employees are a likely source of startup ideas for Alderley Edge. "We have a strong interest in start-ups from AstraZeneca staff and I think that is a start for the new site," AstraZeneca VP Chris Doherty told Insider Media. "The money is for the early incubation stage, trying to get a cohort of 30, 40, 50 companies between now and our exit point is a really important task."
MSP is working with Manchester's universities--which represent one of the largest populations of students in Europe--to further its plans for the 400-acre site. With Big Pharma proving to be an unreliable source of continued employment--and fears of further cuts if Pfizer buys AstraZeneca--the success of such initiatives is important for British bioscience. A similar effort is underway at Sandwich, with the Daily Mail reporting the site is less than halfway to its 2017 goal of creating 3,000 jobs. - read the Insider Media article, Manchester Evening News' coverage and Daily Mail piece
Back to top
Bayer mirrors Mission Bay with startup incubator in Berlin
Bayer has followed up last month's investment in a German startup financing fund by setting up an incubator for young life science companies next to its facility in Berlin. The incubator replicates the model Bayer has used to help startups in Mission Bay, San Francisco, since 2012.
 |
| Bayer's Berlin incubator--Courtesy of Bayer |
While Bayer has only just officially opened the Berlin incubator, it already has three occupants: Calico Biolabs, DexLeChem and Provitro. The incubator has capacity to house up to 9 startups, with each having the opportunity to rent laboratory and office space while collaborating with Bayer's scientists. Bayer is looking for young companies working in the same fields as its researchers, a fact that is apparent from looking at the first three businesses to join the incubator.
Calico Biolabs--which was founded 9 months before Google's ($GOOG) similarly named venture--is a developer of monoclonal antibodies and biomarkers. Having originally set up shop in San Francisco, Calico CEO Robert Pytela decided the opportunity to work next to Bayer researchers justified opening an outpost in Germany. The other two residents are natives of the Berlin life science scene, with DexLeChem being founded at a local catalysis cluster and Provitro working with a city hospital.
Chiral catalysis specialist DexLeChem emerged from the Cluster of Excellence UniCat, a Berlin-centered network of four universities and two Max Planck research institutes. DexLeChem is working to make drug production cheaper by cutting out the use of toxic organic solvents. The third resident, Provitro, provides preclinical and clinical research services, with its ties to the tissue bank at Charité University Hospital Berlin underpinning part of the business. - read the release
Back to top
Da Volterra's answer to antibiotic resistance passes first clinical test
Resistance to antibiotics has become a hot topic in recent years, with the World Health Organization warning just last month that the trend is now a "major global threat." Recognition of the importance of the long-neglected field of antibiotics is a potential boon to French company Da Volterra, which has posted Phase I data on its counterpunch to bacterial resistance.
Data from the 18-person trial is an early validation of the technology that underpins DAV132, Da Volterra's attempt to stop the rise of resistant strains. Such bacteria can come to colonize the colon when antibiotics pass through the small intestine and start killing nonresistant flora farther down the digestive tract. Da Volterra is trying to stop this from happening by developing an adsorbent that captures antibiotics and wrapping it in a drug delivery system that unloads its cargo at the colon.
This way, Da Volterra's product doesn't stop the antibiotic from being adsorbed in the small intestine but steps in to prevent any therapeutic that reaches the colon from disrupting the bacterial balance. Da Volterra took a small step toward validating its theory this week, when Phase I data showed its drug delivery system works as intended. Having gathered the data, Da Volterra is pushing ahead with a second Phase I trial that will give the product for 7 days, instead of the 24 hours in the first study.
 |
| Florence Séjourné--Courtesy of Da Volterra |
The second Phase I trial is already underway, with Da Volterra CEO Florence Séjourné telling FierceBiotech she expects to have results by the end of the year. As well as showing how the product is tolerated over a longer period of time, the current trial will also look at the endpoints Da Volterra wants to confirm in a Phase II study. Séjourné said the Phase I trial and preclinical work to test DAV132 with a broader range of antibiotics is fully funded, but more money will be needed for Phase II.
The low prices commanded by antibiotics have made the sector a tough sell to investors and the heads of Big Pharma companies over the past 20 years, but government efforts to spur development have begun to tip the balance. Séjourné singles out the GAIN Act President Obama signed in 2012 as a trigger for renewed interest in antibiotics. Since then Roche ($RHHBY) bought its way back into the sector, Achaogen ($AKAO) pulled off a $72 million IPO and Melinta Therapeutics raised $70 million from VCs.
Having joined Da Volterra in 2008 from Genfit--the French biotech she co-founded--Séjourné has seen interest in antibiotics return during her time at the company. "Investors were the first ones to jump on this new opportunity. It's promising the same kind of profile as orphan drugs 10 years ago," Séjourné said. - here's the press release and Phase I poster
Back to top
Santhera stock jumps after DMD drug meets endpoint in PhIII
Shares in Santhera Pharmaceuticals (SWX:SANN) jumped 18% after the Swiss company reported that a Phase III trial of its Duchenne muscular dystrophy (DMD) candidate met its primary endpoint. Having gathered the data, Santhera plans to talk to European and U.S. regulators to establish a pathway to approval.
 |
| Santhera CEO Thomas Meier--Courtesy of Treat-NMD |
The double-blind, placebo-controlled trial enrolled 65 DMD patients aged 10 to 18 years old. Patients who received Santhera's once-daily oral DMD candidate had better respiratory function--as measured by peak expiratory flow--than the placebo group at the end of the 52-week trial. The use of peak expiratory flow sets the trial of Santhera's Catena apart from other DMD studies, which typically use the 6-minute walk test (6MWT) as a measure of whether the drug is working.
Sarepta Therapeutics ($SRPT) and Prosensa ($RNA)--both of which have markedly bigger market caps than Santhera--used the 6MWT in their trials but have each hit snags in late-phase development and regulatory talks over the past 6 months. Santhera has presented its use of a different endpoint as a positive for its prospects. Research papers have tied peak expiratory flow to muscle strength, potentially making it a useful marker of progress for a disease that causes muscle degeneration.
Santhera designed the trial to track progress against other respiratory parameters, as well as muscle strength and motor function. Analyses of secondary endpoints are ongoing and Santhera expects to have more information "shortly." The results that emerged so far--coupled to a European refiling for its Leber's hereditary optic neuropathy candidate--have provided a boost to the company, which spent last year cutting costs and trying to get together enough cash to keep the business running.
While the buyout or licensing deal management was looking for never materialized, Santhera raised CHF 10 million ($11.3 million) in equity financing from YA Global in October, giving it enough cash to deliver the Phase III data. At the last count Santhera had CHF 5.3 million in cash and as such it needs to raise more. When management discussed the situation in a press release last month, it was open to a buyout, licensing deal or sale of assets. Santhera has worldwide rights for Catena, the active ingredient of which was originally discovered by Takeda as an Alzheimer's disease candidate. - read the release
Back to top
Fund manager Neil Woodford reportedly pledged his support to e-Therapeutics (LSE:ETX), helping to send the British biotech's stock to highs last seen in 2013. Woodford's Invesco Perpetual's funds invested in e-Therapeutics, and Investors Chronicle reports the relationship is set to continue now the fund manager has set up his own company. Investors Chronicle
Crucell struck a deal with trade unions to provide packages for 250 staff it is laying off at two sites in Switzerland. In November, the Johnson & Johnson ($JNJ) subsidiary outlined plans to cut 380 people from its workforce but has since made the downsizing less severe. Berner Zeitung (German)
A court case began in Denmark to decide whether NeuroSearch is guilty of share-price manipulation. The allegations focus on events in 2010, when the Danish biopharma said a Phase III trial of its Huntington's disease drug had hit its primary endpoint. Several weeks later, NeuroSearch issued another release, this time saying the trial missed its endpoint. NeuroSearch attributed the mix-up to a flawed statistical analysis and denies any wrongdoing. Ekstra Bladet (Danish)
The CFO of Compugen ($CGEN) has left the company. Last week Compugen said Dikla Czaczkes Axselbrad would continue in the role, despite allegations her husband was under investigation for insider trading. Compugen named Avihai Shen as interim CFO. Release
Swiss biotech Gene Signal's drug for a rare eye disease missed its primary endpoint, not that you would know that from a glance at its press release, which trumpeted the "positive" data. FierceBiotech
Management at Oxford BioMedica said they are looking to improve the British biotech's financial position. The company has enough cash to sustain its current level of spending into the third quarter of 2014. While trying to boost its coffers, Oxford BioMedica also plans to strengthen existing ties to Novartis and develop a plan for RetinoStat, which used to be partnered with Sanofi ($SNY). Data from a Phase I trial of RetinoStat are expected toward the end of 2014. Statement
Back to top
Read previous editions of the EuroBiotech Report here.
