Karolinska Development's CEO leaves, Erytech hits PhIII endpoints, VBL belatedly nails IPO

Welcome to the latest edition of our weekly EuroBiotech Report. The CEO of Karolinska Development (STO:KDEV) left the company--9 months after the CFO departed--and the board began a rethink of its strategy. VBL Therapeutics ($VBLX) made a belated start to life on public markets, bouncing back from the August IPO fiasco with a downsized listing. Two public French biotechs published clinical data on their cancer candidates. Erytech (EPA:ERYP) hit both endpoints in its late-stage acute lymphoblastic leukemia trial, while weak data prompted Ipsen (EPA:IPN) to stop three arms of its exploratory Phase II study. LSP raised €80 million ($100 million)--and set its sights on gathering €70 million more--to invest in up to 15 European biotechs. And more. Nick Taylor (email | Twitter)  

1. Karolinska Development's CEO leaves as board rethinks investment strategy
2. VBL Therapeutics pulls off scaled-down IPO at second attempt
3. Erytech targets 2015 EU filing after late-stage leukemia trial hits endpoints
4. LSP plans €150M fund to invest in up to 15 Euro biotechs
5. Ipsen PhII POC cancer trial misses in three out of four indications

And more >>

Karolinska Development's CEO leaves as board rethinks investment strategy

The future looked bright for Karolinska Development (STO:KDEV) when it pulled off a rare, upsized IPO in 2011, but since then its stock has fallen 69% and several of the biotechs in its portfolio have hit roadblocks. Now its CEO has followed its CFO out the door and the board has begun to rethink its investment strategy.

Interim CEO Klaus Wilgenbus

Board member Klaus Wilgenbus has stepped in as interim CEO to replace the departing Torbjörn Bjerke, who joined the company shortly before the IPO in 2011. News of Bjerke's departure and the board's plans to develop a "more stringent investment strategy" triggered a 9% drop in Karolinska Development's stock price, which has declined throughout 2014 despite an upturn in the fortunes of the broader biotech sector.

The difficulties stem from the lack of progress at some of Karolinska Development's portfolio companies. Karolinska Development lists 22 portfolio companies--plus two passive investments--on its website, but its near-term fortunes are tied to some of its later-stage investments. The failure of Axelar's lung cancer drug to beat docetaxel in a Phase II trial and subsequent inability to find a partner led Karolinska Development to take a SEK 220.7 million ($30.6 million) write-down on its investment.

Over the same 6-month period as the write-down on Axelar, portfolio companies Umecrine Mood and Dilaforette both missed primary endpoints in early-stage trials, the latter of which ended prematurely because of slow recruitment. These and other difficulties have prompted the board to rethink its investment strategy, starting by focusing its attention on portfolio companies with potential near- to medium-term inflection points. - read the release

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VBL Therapeutics pulls off scaled-down IPO at second attempt

VBL Therapeutics CEO Dror Harats

Having created headlines for all the wrong reasons with its aborted IPO in August, VBL Therapeutics ($VBLX) has returned to Wall Street to make a downsized listing. The Israeli biotech raised $40 million (€32 million) by selling shares for $6 each, a sum that has forced it to scale back its drug development plans.

In August, it looked like VBL had raised $65 million through a $12-per-share IPO, but the failure of a major investor to come up with the cash forced it to cancel the listing. Now the Tel Aviv, Israel-based company--and the investment group that failed to pay up in the last IPO--is back, The Wall Street Journal reports. The listing gives VBL the money to push ahead with some of its plans--at the end of August it was down to $7 million cash--but the downsizing has forced it to lower its ambitions.

Back in July when VBL hoped to sell shares for $14 each, the company planned to commit $30 million to its lead drug VB-111, a treatment for refractory glioblastoma multiforme (rGBM) and thyroid cancer. The cash would have taken the drug through Phase III and as far as a regulatory filing in rGBM. Now, with just $20 million to commit to development in rGBM, VBL expects to have enough cash to generate interim data from the Phase III trial.

If the data look good in 2016, VBL may be able to generate cash to restart some of its other projects. VBL originally planned to move a candidate from its anti-inflammatory program--which is based on its immune-modulating lecinoxoid platform--into the clinic and build a production plant for VB-111. - read the WSJ article (sub. req.), Globes' take and the SEC filing

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Erytech targets 2015 EU filing after late-stage leukemia trial hits endpoints

Erytech CEO Gil Beyen

A late-phase trial of Erytech's (EPA:ERYP) treatment for acute lymphoblastic leukemia (ALL) has met both its primary endpoints, prompting the French biotech to begin work on a European regulatory filing. Erytech is aiming to have its submission with the European Medicines Agency in the first half of 2015.

The trial looked at Graspa, a formulation of L-asparaginase that loads the enzyme into red blood cells. L-asparaginase has been used to treat acute leukemia since the 1960s, but it triggers allergic reactions in some patients. By encapsulating the enzyme in red blood cells, Erytech hoped to create a therapy with a better side-effect profile.

Two of the trial's arms compared Graspa to L-asparaginase in patients without a history of allergic reactions to the enzyme, while the third gave Erytech's drug to people who were hypersensitive to the enzyme. The head-to-head found that Graspa has a better side effect profile. None of the 26 patients who received Graspa had allergic reactions. Almost 43% of the L-asparaginase arm had reactions.

The data were strong enough for Erytech to hit its first co-primary endpoint, which required a fall in allergic reactions. The other endpoint looked at asparaginase activity duration. Asparaginase levels in people who took two shots of Graspa were over 100 IU/l for 20.5 days in the first month of treatment. In the control group, 8 injections were needed to stay at about the target level for 9.2 days.

Erytech's stock closed up almost 13% on the day it released the data. - read the release

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LSP plans €150M fund to invest in up to 15 Euro biotechs

LSP partner Joachim Rothe

LSP has raised €80 million ($100 million) for its latest life science investment fund, previous versions of which have backed arGEN-X (EBR:ARGX), Okairos and Prosensa ($RNA). The end goal is to round up €150 million to finance 10 to 15 developers of drugs and medical technologies.

Amsterdam-based LSP plans to spread the money across different stages of development, a strategy it has used with its previous funds. Talking to BioCentury earlier this year, LSP partner and co-owner Joachim Rothe said the company typically divides its investments evenly between the seed stage, Series A or B rounds and late-stage projects. Drug developers receive a slightly bigger slice of the cash than med tech companies.

Pfizer ($PFE) invested in the previous fund, the €90 million LSP IV. LSP has yet to name any of the groups that have backed the latest fund, but said a large pharma company that invested in LSP IV has also committed cash to its new pool. Links to strategic investors have helped LSP in the past. GlaxoSmithKline ($GSK) was involved with LSP III and went on to buy one of the fund's portfolio companies, Okairos, for €250 million last year.

Successful exits through trade sales and IPOs have allowed LSP to scale up its new fund. LSP IV--which closed in 2009--was the company's smallest fund since it started the series with the €55 million LSP I in 1998. If LSP V reaches its financing goal it will surpass the size of the previous four funds, the biggest of which was the €140 million LSP III that closed in 2005. - read the release, FierceBiotech's take and BioCentury's feature

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Ipsen PhII POC cancer trial misses in three out of four indications

Ipsen CEO Marc de Garidel

In October 2012, Ipsen (EPA:IPN) set out to learn whether the prostate cancer drug it had licensed from Active Biotech had the potential to treat other types of tumors. Now the data are in, and Ipsen has no plans to further develop the drug in at least three of the four indications being investigated.

At ESMO 2014, Paris-based Ipsen said data from patients with advanced ovarian, renal cell and gastric carcinomas who took tasquinimod were too weak to justify continuing development. A fourth arm of the open-label proof-of-concept study--dubbed "Umbrella" by Ipsen--passed the interim futility analysis and is due to report final data next year, at which time management will decide whether to take the drug forward in hepatocellular carcinomas.

Almost 50 patients are enrolled in the hepatocellular trial. Ipsen thinks tasquinimod might work in the indication because the antiangiogenic potential that has helped it advance to late-phase prostate cancer trials is relevant to other tumors. The same thinking underpinned the decision to run proof-of-concept tests in the other three indications.

While the closing off of three development pathways is an unwelcome event, Ipsen knew there was a risk tasquinimod would fail to show sufficient clinical activity in the indications and designed the trial to allow research to stop early. - read the release (PDF) and abstract

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Of Note:

Prophylix Pharma committed to advancing its drug to protect newborns from fetal and neonatal alloimmune thrombocytopenia (FNAIT)--a rare fatal bleeding disorder--into Phase I/II in the third quarter of 2015. The Norwegian biotech is now looking for women who have had a child suffer from FNAIT to donate their plasma, which is used in the production of the drug. Release

Cardio3 Biosciences (EBR:CARD) outlined plans to expand its pipeline through a new business development strategy. The plan is focused on cellular therapies and cardiovascular diseases. Release

BioNTech and Ganymed Pharmaceuticals opened a joint R&D facility. The 10,000-square-meter site will house 300 employees from across the two German biotechs. Release

Oxford BioTherapeutics and Menarini Group picked a second antibody-drug conjugate from their collaboration to advance into the clinic. The treatment is targeting non-Hodgkin's B-cell lymphoma and solid tumours. Release

ImmuPharma (AIM:IMM) began preparing to take its lupus candidate into Phase III. The British biotech made the decision to proceed to Phase III after completing due diligence with a potential partner, which is expected to fund the study. Release

The application window for the OneStart program run by GlaxoSmithKline's ($GSK) venture unit opened. Johnson & Johnson ($JNJ) is playing a bigger role in this year's competition, which will award a European startup with £100,000 ($160,000) and free lab space. Release

Zealand Pharma (CPH:ZEAL) received a €2 million ($2.5 million) milestone payment from Helsinn in relation to development of a drug to prevent chemotherapy-induced diarrhea. A Phase IIb dose-finding study is due to start later this year. Release

Kymab made a clutch of new top-level appointments, bringing its total for the year up to 10. The Cambridge, England-based biotech is flush with cash after raising $40 million (€32 million) earlier this year. Cabume

Servier exited its partnership with Pharmacyclics ($PCYC). The companies called the split--which ends a relationship that began in 2009 with a $15 million (€12 million) upfront payment from Servier--mutual and amicable. FierceBiotech

Atox Bio won a contract with the Biomedical Advanced Research and Development Authority (BARDA) that could be worth up to $24 million (€19 million) over the next 5 years. BARDA has tasked Israel's Atox Bio with developing a treatment for necrotizing soft tissue infection. Release

Polyheal entered into a nonbinding memorandum of understanding with an unnamed European pharma company. The agreement covers the global rights to Polyheal's wound-healing products. Globes

Dutch biotech to-BBB changed its name to BBB Therapeutics and hired chief medical and scientific officers. The hires complete a new-look management team, which is led by a CEO and CFO who joined in January. Release

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