Welcome to the latest edition of our weekly EuroBiotech Report. A who's who of Big Pharma companies joined a European public-private consortium this week to develop and test new economic models of antibiotic R&D. The goal is to make antibiotic R&D economically attractive again. Karo Bio (STO:KARO) was forced to assess the financial viability of its R&D operation after Pfizer ($PFE) decided to move a collaboration into its own labs. The Swedish biotech is preparing to lay off staff. NeuroSearch has long since shed its staff and is now offloading the last of its assets. Saniona picked up two of its early-phase drugs in a no-cash deal. Advent Life Sciences raised £145.5 million ($235 million) to invest in biotechs on both sides of the Atlantic. British nonprofits Cancer Research UK and Leukaemia & Lymphoma Research teamed up to take blood cancer candidates out of the lab and up to Phase II trials. And more. Nick Taylor (email | Twitter)
1. Who's who of Big Pharma join EU antibiotic R&D initiative
2. Karo Bio plans job cuts as Pfizer takes control of R&D collaboration
3. Advent's plan for £146M fund: Young biotechs, big investments, quick returns
4. NeuroSearch gives drugs away after failing to find partners or capital
5. Nonprofits team up to take blood cancer candidates to clinical POC
And more >>
The drying up of antibiotic pipelines has attracted the attention of the World Health Organization, the Obama administration and many others, but for all the talk one fundamental question remains: how to make R&D financially viable. Now, a laundry list of Big Pharma companies have teamed up with European academic centers to tackle the question.
Astellas ($ALPMY), AstraZeneca ($AZN), Cubist ($CBST), GlaxoSmithKline ($GSK), Roche ($RHHBY), Pfizer ($PFE) and Sanofi ($SNY) have all signed up to the project, which plans to develop and test new economic models of antibiotic R&D. The public-private consortium--called DRIVE‐AB--hopes to have a model it can recommend for real-world use by the time it reaches the end of its three-year program. Europe's Innovative Medicines Initiative has committed €9.4 million ($12.0 million) to the project.
The funding is dwarfed by the economic cost of the problem. Infections resistant to multiple drugs are estimated to rack up annual societal costs of €1.5 billion in the European Union and kill 25,000 people. If DRIVE‐AB is to help lower these figures, it must find a way to flip antibiotic R&D from a high-risk, low-return field into one that offers attractive returns to Big Pharma. The failure to do so could lead to more companies retreating from the sector.
In recent years, Roche has made a high-profile return to the field and Cubist has built a business on antibiotics, but AstraZeneca is rumored to be mulling an exit from the sector. AstraZeneca neither confirmed nor denied the rumors when questioned by Pharmalot late last week. - read the DRIVE‐AB release and the Pharmalot post
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|Karo Bio CEO Per Bengtsson
Karo Bio (STO:KARO) is preparing to lay off staff after Pfizer ($PFE) decided to take control of an autoimmune collaboration. Pfizer has funded Karo Bio's research into RORgamma modulators since it struck a $217 million (€170 million) deal in 2011, but will move the work into its own laboratories at the end of this year.
Huddinge, Sweden-based Karo Bio has responded by outlining plans to "adjust its organization." Karo Bio CEO Per Bengtsson confirmed to FierceBiotech that the reorganization will entail job cuts, but was unable to provide details of how many positions are at risk. With the current relationship with Pfizer running until the end of 2014, Bengtsson expects to have concrete details about the cuts in the next two months.
Karo Bio is still set to receive milestones if Pfizer advances the project, but its laboratory will stop playing a major role in development of the technology that it began working on in 2010. The project is trying to target nuclear hormone receptor RORgamma to treat rheumatoid arthritis, multiple sclerosis and other autoimmune disorders. Pfizer saw enough promise in the approach to commit to $217 million in upfront and milestone payments in 2011 and renew its funding of Karo Bio's R&D last year.
The Pfizer program is one of three active projects at Karo Bio, which has struggled over the past decade to live up to the potential that caused its shares to trade at almost SEK 500 in 2000. In the past year, the stock has never come close to SEK 2. Hopes of a turnaround rest on the Pfizer collaboration, a preclinical cancer project and a MS candidate. Karo Bio is looking for a partner for the MS project and is working to provide data to further discussions early next year. - read the release
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|Advent General Partner Raj Parekh
Advent Life Sciences has joined the growing list of venture capital groups with fresh funds to invest in European biotechs. London, England-based Advent will use the £145.5 million ($235 million) fund to help 15 biotechs reach mid-term exits.
The plan is to find early to midstage biotechs on either side of the Atlantic that have the potential to IPO or sell up within 5 years, BioWorld Today reports. Advent took a similar approach with its last life science fund and an earlier investment vehicle that also backed IT startups. The focus on quick returns--the mixed biotech-IT fund returned the capital in 6 years--is central to Advent's pitch to investors.
"They need to exit through IPO or sale in a reasonable time frame," Advent General Partner Raj Parekh said. While it might take 10 to 15 years for the drugs developed by Advent's portfolio companies to reach the market, its investors are unwilling to wait that long to see a return on their investment. All of the money raised for the life science fund--which topped its initial target--came from independent financial investors such as funds-of-funds, pension funds and family offices.
The fundraising caps off a big month for Europe-based life science funds. Since September 30, four funds have raised €421 million. And the total could swell to €634 million if each fund hits its closing target. Cash flowing into biotechs dropped sequentially in the third quarter, though. Dow Jones VentureSource calculated that healthcare companies raised 26% less cash than in the second quarter, despite three biotechs being among the 5 biggest investments. - read BioWorld's article (sub. req.), Advent's release and Dow Jones' report
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|NeuroSearch Chairman Karin Garre
NeuroSearch has offloaded two early-phase programs to Saniona. No money changed hands, but NeuroSearch freed itself of the cost of maintaining the patent rights and will receive 20% of any milestones and royalties Saniona manages to make from the programs.
Hellerup, Denmark-based NeuroSearch has spent the past few years trying to raise money to move the programs through development or find a partner that can shoulder some of the burden. Having accepted that neither goal is achievable, NeuroSearch has given the drugs to Saniona, a fellow Danish biotech with which it has close ties. Phase II obesity candidate tesofensine is the main attraction.
Saniona, which has a U.S. spinout financed by Atlas Venture and Biogen Idec ($BIIB), plans to combine tesofensine with metoprolol. The combination is designed to prevent the blood pressure and heart rate increases that put a black mark against tesofensine when it was last trialed. Saniona has filed a patent for the combination based on preclinical data and hopes to find a partner for Phase II.
For NeuroSearch, the deal marks another milestone in its gradual dismantling. The company was convicted of share price manipulation earlier this year and is currently mounting an appeal. - read the releases from NeuroSearch and Saniona
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British nonprofits Cancer Research UK (CRUK) and Leukaemia & Lymphoma Research (LLR) have joined forces to advance treatments for blood cancers to clinical proof-of-concept. LLR is providing candidates from its internal pipeline and sharing the cost of moving them through preclinical research and up to Phase II.
CRUK will run the clinical trials across the Experimental Cancer Medicine Centre network that it cofunds with the United Kingdom's departments of health. Partnering with CRUK gives LLR access to the infrastructure and expertise that will be needed if its therapies are to successfully bridge the gap between the lab and the clinic. The partners expect to run at least 5 clinical trials over the initial, 5-year duration of the deal.
Dr. Nigel Blackburn, director of CRUK's drug development center, sees value in combining his group's clinical know-how with LLR's research chops and is pushing for nonprofits to pool their resources more often. "We hope this will pave the way for further strategic partnerships with other charities who are interested in working together to speed up the translation of today's scientific discoveries into future cancer treatments," Blackburn said in a statement. - read the release
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The United Kingdom government committed to investing £150 million ($240 million) into clinical trial infrastructure. Nonprofits, universities and other groups are also providing funds, resulting in a pool of £230 million to finance 23 projects. Release
Brabant Pharma accepted a $35 million (€28 million) cash and stock offer from Zogenix. The buyout gives Zogenix the global rights to a Dravet syndrome candidate that is due to enter Phase III next year. British biotech Brabant was founded last year to develop a treatment that has shown potential in a long-running open-label study. Release
Chroma Therapeutics agreed to sell its stake in tosedostat to CTI BioPharma ($CTIC) for $21.3 million (€16.8 million) in stock. In doing so, Oxford, England-based Chroma ended a deal that could have netted it $209 million in milestones. Release
A Phase IIa trial of AnaMar's treatment of inflammatory pain in patients with osteoarthritis of the knee missed its primary endpoint. AnaMar is now running subgroup analyses. Release
The FDA and the EMA granted orphan drug status to products being developed by Kamada ($KMDA) and Kiadis Pharma, respectively. Kamada received the FDA nod for its graft-versus-host-disease therapy, while the EMA recognized Kiadis' acute myeloid leukemia candidate. Kamada | Kiadis
NeuroDerm presented top-line data from a Phase II trial of its Parkinson's disease treatment. The trial linked the therapy to a clinically significant drop in fluctuations of plasma levodopa concentrations. Release
Galapagos (AMS:GLPG) entered into a research collaboration with Calchan. London, England-based Calchan formed the alliance after securing a £2.4 million ($3.9 million) grant from Innovate UK to discover osteoarthritic pain drugs. Release
Having spent all of 2014 preparing to list on the Oslo Stock Exchange, Cortendo has had a late change of heart. The orphan drug developer is now considering listing in the U.S., in part to increase brand recognition in the biggest potential market for its Phase III Cushing's syndrome candidate. FierceBiotech
The FDA cleared Intec Pharma (TASE:INTP) to run a Phase III trial of its Parkinson's disease treatment, which uses a novel drug delivery system to prolong the absorption phase of the drug. Globes
F-star Alpha struck a $475 million (€377 million) option deal with Bristol-Myers Squibb ($BMY). Alpha is a spinout of Cambridge, U.K.-based F-star. FierceBiotech
ImevaX raised €7.5 million ($9.5 million) in a Series A round led by Wellington Partners. The money gives ImevaX the resources to move its Helicobacter pylori vaccine into the clinic. Release
Clal Biotech (TASE:CBI) unit Curetech sold the rights to its anti-PD-1 monoclonal antibody to Medivation ($MDVN) for a tiny upfront fee and up to $330 million in milestones and royalties. Teva ($TEVA) was partnered on the drug until it ended its relationship with Curetech last year. Release
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