Imperial to raise £150M, Prosensa finds caveats for PhIII fail, Orion targets niche next to J&J

Welcome to the latest edition of our weekly EuroBiotech Report. With British biotechs already buoyed by the arrival of funds backed by AstraZeneca ($AZN) and Eli Lilly ($LLY), Imperial Innovations (AIM:IVO) gave them more reasons to be cheerful this week by outlining plans to raise £150 million ($251 million). And if Neil Woodford gets his way, another early stage-focused fund will be setting up in England. By then British doctors could have greater freedom to give experimental treatments to patients, with a proposed law previously damned by some as a "quack's charter" reentering the legislative process. Dutch biotech Prosensa ($RNA) also told a comeback story, revealing it will submit its Duchenne muscular dystrophy drug to FDA later this year despite the Phase III failure on its record. Finland's Orion (XHEL:ORNBV) is just starting out on a Phase III trial of a prostate cancer drug it sees finding a niche alongside market leaders Johnson & Johnson ($JNJ) and Medivation ($MDVN). Bayer has backed the vision with a €50 million upfront payment. A British biotech that spun out of GlaxoSmithKline ($GSK)--and lists Pfizer ($PFE) among its investors--won a grant to help move its tinnitus treatment into Phase IIa. And more. Nick Taylor (email | Twitter)

1. Imperial Innovations aims to raise £150M for investment push
2. Prosensa CEO: PhIII trial may have failed drug, rather than drug failing PhIII
3. Orion aims to join J&J, Medivation on prostate cancer pathway
4. GSK spinout wins grant to take tinnitus drug into PhIIa
5. Britain mulls freeing up docs to use experimental drugs

And more >>

Imperial Innovations aims to raise £150M for investment push

British biotechs have been boosted by a series of positive capital developments over the past month, with Eli Lilly ($LLY) and AstraZeneca ($AZN) both backing new funds. And the good news continued this week, with Imperial Innovations (AIM:IVO) seeking to raise £150 million ($251 million) and Neil Woodford revealing his ambition to create a startup-focused fund.

Imperial Innovations CEO Russell Cummings--Courtesy of Imperial Innovations

Imperial Innovations' fundraising plans come months after the huge IPO of its portfolio company Circassia Pharmaceuticals (LSE:CIR) validated its business model. The tech-transfer business has already lined up investments worth around £100 million in existing and prospective companies over the next 12 months. "We are investing more capital into companies we know well, where the technology has been de-risked somewhat," Imperial Innovations CEO Russell Cummings told The Guardian.

Shareholders controlling almost 90% of Imperial Innovations' stock have backed the plan, with big stockholder Invesco Perpetual and its former fund manager Neil Woodford among the supporters. Woodford's new company owns 2.9% of Imperial Innovations. The new Woodford fund is still taking shape, but more concrete details of where it will invest have begun to emerge. "The fund will look and feel like the fund I managed before," Woodford said in a webinar run by United Kingdom investment fund Fidelity.

At Invesco, Woodford put most of his funds in a small group of companies, but he also became known for backing biotech startups. The new fund will follow the same model--with a long tail of small investments trailing behind the core of big companies--but Woodford wants to get deeper into startups. "I would like to launch something that has a more concentrated exposure to early stage businesses. That's something we're working on as a business right now," he said. - here are the Imperial Innovations release, Guardian piece and Fidelity webinar

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Prosensa CEO: PhIII trial may have failed drug, rather than drug failing PhIII

Prosensa ($RNA) has spent the 9 months since its Duchenne muscular dystrophy (DMD) drug failed a Phase III trial digging through its various data sets trying to figure out where it went wrong. And now it has hit upon a hypothesis FDA views as "plausible," prompting the Dutch biotech to target an accelerated regulatory approval in 2015.

Prosensa CEO Hans Schikan

The hypothesis emerged when Prosensa compared the baseline characteristics of participants in the failed Phase III trial with those treated in earlier, more successful Phase II research. Boys who took part in the Phase III trial had a lower baseline in the 6-minute walk test, performed worse in all measures of muscle function and were generally older than their counterparts in Phase II, Prosensa CEO Hans Schikan told investors in a conference call to discuss the regulatory path forward.

Schikan thinks these differences in baseline characteristics may account for the Phase III flop. "It is possible the Phase III trial may have failed the drug, rather than the drug failing the trial," Schikan said. In a letter to Prosensa, the FDA called the company's theories "plausible but not conclusive." The FDA also said it has "reservations about the persuasiveness of the available data," but is willing to consider a new drug application for Prosensa's drug, drisapersen.

KBC Securities analyst Jan De Kerpel thinks the drug could go on to hit peak sales of €1 billion ($1.4 billion) a year by 2020, Reuters reports, but others are sceptical. After rising in premarket trading on the day of the news, shares in Prosensa sunk throughout the day to close down almost 6%. The stock rebounded the following day.

Prosensa plans to file later this year. As TheStreet's Adam Feuerstein notes, the timing sets up a likely doubleheader FDA advisory panel meeting in mid-2015, at which experts will review Prosensa's drug and that of its DMD rival Sarepta Therapeutics ($SRPT). Both have suffered regulatory setbacks over the past 9 months but now have an opportunity to make their case to a FDA advisory committee.

Schikan and his colleagues have also had to cope with the loss of their partner, GlaxoSmithKline ($GSK), which pulled out of the alliance in January. Prosensa is thinking about a new partnership, Schikan said, but is in no rush to strike a deal. "With the experience we have from Genzyme and other rare disease companies, we think we have the knowledge to build commercial infrastructure by ourself," Schikan said. - read TheStreet's article, Reuters' take, FierceBiotech's piece and the FDA letter

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Orion aims to join J&J, Medivation on prostate cancer pathway

While Johnson & Johnson ($JNJ) and Medivation ($MDVN) have improved outcomes for patients with castration-resistant prostate cancer, declining efficacy over time is a concern. Having gathered Phase II data that suggested its drug might be able to help these patients, Finland's Orion (XHEL:ORNBV) has struck a deal with Bayer to take the candidate through late-phase trials.

Orion CEO Timo Lappalainen--Courtesy of Orion

Bayer is paying €50 million upfront to gain global rights to Orion's drug, ODM-201, which the Finnish company views as a possible treatment for patients who have become resistant to hormone therapies. In a Phase II trial, ODM-201 caused levels of prostate cancer biomarker PSA to drop in 41% of patients who had previously received a CYP17 inhibitor, mostly J&J's Zytiga. If Orion can improve outcomes for these patients in the 1,500-person trial that is due to start this summer, ODM-201 could carve out a corner of the prostate cancer market.

Bayer already has a drug that targets bone metastases from prostate cancer, Xofigo, approved in the U.S. and Europe. And while no trials combining the two therapies are currently planned, Orion CEO Timo Lappalainen told investors "it would be natural for the organizations to evaluate and study options to further exploit the potential of [ODM-201]." Bayer has already shown a willingness to find the best cocktails, notably by collaborating with J&J to trial Xofigo in combination with Zytiga.

For now the focus is on the Phase III trial of ODM-201. Lappalainen expects to open the first of 300 trial sites this summer but declined to commit to a timeline for completing the study. The trial will end when a prespecified number of events happen, as opposed to after a set duration of treatment. Orion has already spent cash setting up the trial, and the costs for the rest of the year will come out of the €50 million it received from Bayer. From 2015 onward, Bayer will cover the bulk of the costs, with Orion receiving milestones and eventually what Lappalainen described as "pretty typical" royalties. - read the release and FierceBiotech's coverage

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GSK spinout wins grant to take tinnitus drug into PhIIa

A biotech that spun out of GlaxoSmithKline ($GSK) in 2011 has landed a grant to move its tinnitus treatment into Phase IIa. And with SV Life Sciences, Imperial Innovations (AIM:INO) and Pfizer's ($PFE) venture wing among its investors, some high-profile players are keeping tabs on the progress of Autifony Therapeutics.

Autifony will put the £2.2 million ($3.7 million) grant from the United Kingdom's government-backed innovation agency--the Technology Strategy Board--towards its upcoming Phase IIa trial. Data from a 60-person Phase I trial of the drug, AUT00063, was free from serious adverse events. And the pharmacokinetics appeared compatible with the daily oral dosing regimen Autifony plans to use. Having built this platform of early-stage data, Autifony will now start testing the efficacy of the drug.

Autifony Therapeutics' CEO Charles Large

When Autifony spun out of GSK in 2011, it took preclinical candidates targeting voltage-gated ion channels and secured £5 million from both SV Life Sciences and Imperial Innovations to fund the development. Pfizer Venture Investments chipped in another £5 million before the Phase I trial got underway last summer. Former GSK neuroscience director Charles Large is in charge of spending the cash, with a colleague from his time at the Big Pharma, Giuseppe Alvaro, heading up drug discovery.

Ex-Genzyme staffer Peter Harris is handling clinical development in his capacity as chief medical officer. If Harris and his team deliver positive Phase IIa data, Autifony will be one step closer to the untapped tinnitus market. A 2013 paper in The Lancet claimed tinnitus severely impairs the quality of life of up to 2% of people, with up to 15% of the population suffering from milder forms of the condition, but there is no single treatment. - read the release (PDF)

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Britain mulls freeing up docs to use experimental drugs

With "right to try" laws popping up across the U.S., a British lord has proposed legislation designed to free doctors to use experimental treatments on terminally ill patients. The bill--which was originally introduced in 2012--has polarized opinion, with critics calling it "a quack's charter."

Lord Saatchi

The author of the bill, Lord Saatchi, has tried to address these concerns in the latest version of the bill, with changes being made to ensure that treatments are in the best interests of the patient. Doctors seeking to use an experimental treatment on a patient would first need approval from a body of experts. If the experts approved and the patient consented, the doctor would then be free to use the treatment. Currently a doctor who tried something experimental could be sued for negligence.

Saatchi argues that the threat of legal action deters doctors from trying new treatments. However, the bill's critics say that Britain--unlike the U.S.--lacks a culture of medical malpractice cases and the fear of litigation isn't an issue. Others worry that the bill will undermine clinical trials. This argument says that if doctors and patients know they can access experimental drugs without entering a trial, they will have no incentive to join a study.

In this scenario, drugs would increasingly be tested outside of randomized controlled trials. The U.K.'s Health Research Authority (HRA) summed up the concerns with this outcome. "Where innovation becomes experimentation then this leads to an absence of published data," HRA wrote. HRA calls for the publication of results--regardless of whether the treatment succeeds or fails--and advocates of the bill are also conscious of the need to encourage the spread of information.

Speaking to the Financial Times, Oxford University professor Stephen Kennedy revealed he is trying to get the government to fund and create a database for doctors using experimental therapies. This would allow doctors to benefit from the experiences of their peers while also adding a layer of accountability. Neither the database nor the funding it needs are in Saatchi's bill, however. - read the FT articleTelegraph's coverage and HRA's response

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Of Note:

Austria's Affiris made a bizarre "breakthrough" in its Phase II trial of an Alzheimer's vaccine. While 31% of patients taking the most effective dose and formulation of the vaccine experienced clinical stabilization after 18 months, 47% of people in one of the placebo arms achieved this status. And the placebo appeared to stop shrinkage of the hippocampus, part of the brain involved with memory. Management thinks something other than the placebo effect is happening, but the mechanism of action is a mystery as the "treatment" lacks the peptide designed to trigger an immune response. Affiris plans to test the placebo, now named AD04, in a placebo-controlled trial and also work to find the optimal dose. BioWorld I FierceBiotech

Oxford-based biotech Adaptimmune struck a company-defining T-cell engineering immuno-oncology deal with GlaxoSmithKline ($GSK). The deal gives Adaptimmune, which spun out of Medigene (XETRA: MDG1) in 2008 as a virtual biotech, cash to fund its work for the next 7 years. And with the relationship with GSK in place, Adaptimmune sees little need to look for more Big Pharma partners for now. FierceBiotech

Norwegian immunotherapy developer Targovax raised NOK 70 million ($11.7 million) to develop its pipeline of drugs targeting RAS mutated cancer forms. A clinical-stage pancreatic cancer treatment is the company's most advanced candidate. Release

Sanofi ($SNY) CEO Chris Viehbacher relocated from Paris to Boston, prompting questions about the company's commitment to France. The company downplayed the move, describing it as a "personal family decision" that will have no effect on operations at Sanofi. Viehbacher has previously said he likes Boston, the city in which his son is studying. FierceBiotech | Reuters

Maggot therapy company BioMonde raised £3.5 million ($5.9 million) to fund its expansion in the U.S. The Wales-based business is setting up a U.S. production plant for its therapy, which updates the method of using maggots to treat wounds with a novel, FDA-approved delivery system. BioMonde already sells the device in Europe, bringing in sales of £5 million last year. WalesOnline

4d pharma (AIM:DDDD) bought a further 37.5% of fellow British drug developer GT Biologics for £1.2 million ($2.0 million), taking its total stake in the company to 83.5%. GT Biologics' lead candidate--a treatment for pediatric Crohn's disease--received FDA orphan designation in October. Statement

German biopharma Biofrontera listed on London's AIM to build its international investor base. The company--which is already listed in Frankfurt--sells a skin cancer drug in Europe and claims a 65% market share in Germany. Having built a base in Europe, Biofrontera expects to submit an application to FDA next year, with a view to releasing the product in the U.S. in 2016. Release

Shire ($SHPG) stumped up €15 million ($20 million) to expand its relationship with Dutch biotech arGEN-X. In return for the the payment--€12 million of which is in equity--arGEN-X will use its technology to discover antibodies against multiple targets within Shire's areas of therapeutic focus. Shire will handle clinical development and commercialization--paying milestones and single-digit royalties on any successes--with arGEN-X having the option to license any compounds its partner doesn't want. The deal comes one week after arGEN-X added Bayer to its list of partners. Release | FierceBiotech

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Read previous editions of the EuroBiotech Report here.