Welcome to the latest edition of our weekly EuroBiotech Report. The United Kingdom yielded to pressure to change its patent box policy. Once the changes come into force, only intellectual property created from R&D done in Britain will be able to claim the 10% tax rate. The policy was part of what attracted Pfizer ($PFE) to AstraZeneca ($AZN), but other countries--notably Germany--were less enamoured with the initiative. The European Investment Fund guaranteed €200 million ($249 million) worth of loans from Bankinter, setting the stage for the Spanish bank to make more cash available to biotechs and other innovative startups. The University of Oxford also found a new source of cash for early-stage drug development, teaming up with Ohio-based Harrington Discovery Institute to help programs reach the clinic. Boehringer Ingelheim passed on an opportunity to buy Athera Biotechnologies' Phase I cardiovascular drug. The FDA awarded fast-track status to MorphoSys' (ETR:MOR) MOR208 in patients with refractory diffuse large B-cell lymphoma. And more. Nick Taylor (email | Twitter)
1. U.K. agrees to water down R&D tax break that attracted Pfizer to AstraZeneca
2. EU fund strikes deal with Spanish bank to provide €200M to innovative startups
3. Boehringer pulls out of cardiovascular deal with KDEV's Athera
4. Oxford Uni strikes transatlantic drug discovery funding deal
5. FDA puts MorphoSys' lymphoma drug on its fast track
And more >>
The opponents of certain types of national tax incentives have claimed another scalp. Weeks after Ireland decided to drop the "Double Irish" scheme, the United Kingdom has agreed to water down the patent box initiative that was cited as a motivation for Pfizer ($PFE) to buy AstraZeneca ($AZN).
|Chancellor of the Exchequer George Osborne|
Following the changes, companies will only benefit from the patent box--which cuts the tax rate on profits from patented products to 10%--if the R&D that created the intellectual property was done in Britain. The original patent box was open to products discovered overseas, a stipulation that led to accusations the scheme would encourage companies to funnel profits from products developed and sold around the world into the U.K. to lower their tax rate.
Germany led international opposition to the scheme, The Financial Times reports, and eventually reached a compromise just before the start of the G20 meeting in Brisbane, Australia. The terms of the deal allow the U.K. to keep the patent box in its current form for a number of years, prompting the government to hail the agreement as a "great deal for Britain." German government officials have also welcomed the compromise.
The delay in implementation of the changes means little will change in the near term, but eventually companies that want to benefit from the scheme will need to base their R&D in the U.K.
- read the FT article (sub. req.)
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|European Research, Science and Innovation Commissioner Carlos Moedas|
The European Investment Fund (EIF) has struck a deal with Bankinter to make €200 million ($249 million) available to biotechs and other innovative small businesses. Spanish bank Bankinter will hand out the cash in the form of €25,000 to €7.5 million loans over the next two years.
EIF is guaranteeing the loans through its InnovFin program, which was also responsible for the €75 million risk-sharing deal the fund struck with UCB (EBR:UCB) in June. The UCB agreement represented the first time the European Union's lending bank had struck a major drug-development deal. Since then, EIF has hosted a seminar for executives at biotechs and other startups to discuss their needs and how its €24 billion innovation fund can help.
The Bankinter deal is a continuation of EIF's strategy to make it easier for small businesses to access its cash. In the past, EIF's loan deals have been criticized for favoring big businesses. "We have started to deliver our promise to stimulate private investment for sustainable growth creation and a more competitive Europe," European Research, Science and Innovation Commissioner Carlos Moedas said in a statement.
Moedas wants to see more deals to help small businesses, starting with an add-on to the Bankinter agreement. The European Investment Bank is finalizing a €200 million credit facility with the bank that could make more money available for startups.
- read the release
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|Athera CEO Carina Schmidt|
Boehringer Ingelheim has dealt a blow to Athera Biotechnologies. Less than 18 months after entering into an option agreement for Athera's cardiovascular antibody, Boehringer has decided to pass on the opportunity.
The decision comes less than one month after Athera dosed the first patient in a 48-person Phase I trial of the drug, a fully human antibody that targets a driver of vascular inflammation. Boehringer paid an option fee--the amount of which was never disclosed publicly--for the right to buy all assets and rights associated with the program once Athera had preclinical and Phase I data. However, the German biopharma has already decided against exercising its option.
"Boehringer regularly undergoes the evaluation of its R&D and pipeline activities. As a consequence of such refocusing, we have decided to not execute the option that we had for a potential partnership with Athera," Boehringer spokesperson Julia Meyer-Kleinmann told GEN. The decision has no bearing on Boehringer's interest in cardiovascular R&D in general.
The decision leaves Stockholm, Sweden-based Athera to advance the antibody towards clinical proof of concept without a large pharma development partner. Athera--which is 65% owned by Karolinska Development (STO:KDEV)--does have support in place, though. A €6 million European Union grant to a consortium developing the drug with Athera is expected to cover the bulk of the costs.
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|Harrington Discovery Institute Director Dr. Jonathan Stamler|
The University of Oxford has teamed up with Ohio-based Harrington Discovery Institute to create a new source of funding for early-stage drug development projects. Harrington Discovery Institute set up shop in 2012 to support translational research programs run by physician-scientists, an approach that it is now bringing to the United Kingdom.
Staffers at the Oxford-Harrington Scholarship Program will look for drug-development programs that may struggle for money as they advance beyond the university-funded, basic science stage. In the U.S., Harrington Discovery Institute is supporting 27 such projects as part of a $250 million (€200 million) initiative. Once the Oxford-based collaboration goes live, researchers across the U.K. will have a chance to claim a slice of the cash.
Nuffield Department of Medicine professor Alison Simmons is the first to win backing from the U.K. program. Dr. Simmons received an undisclosed amount to develop drugs that treat Crohn's disease by fixing a faulty immune receptor. The program is still at a very early stage, but the Oxford-Harrington program is willing to support researchers through to early-phase clinical trials. Harrington's commercial partner, BioMotiv, is opening a site in Oxford to support researchers through midphase studies and beyond.
Harrington is far from alone in trying to help British academics turn their research into viable drug-development programs. The government-funded Medical Research Council's Developmental Pathway Funding Scheme targets research at the same stage of development, while the University of Oxford has its own tech-transfer wing and ties to Imperial Innovations (AIM:IVO).
- read the release (PDF)
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|MorphoSys Chief Development Officer Dr. Arndt Schottelius|
The FDA has given a boost to MorphoSys' (ETR:MOR) proprietary pipeline by awarding fast-track status to MOR208, an antibody the German biotech licensed from Xencor in 2010. MorphoSys will now benefit from more frequent talks with the FDA as it plots its strategy for taking MOR208 into late-phase trials.
The FDA put MOR208 on its fast track as a treatment for refractory diffuse large B-cell lymphoma (DLBCL), a form of non-Hodgkin's lymphoma that accounts for up to 30% of all cases diagnosed in the U.S. MorphoSys picked DLBCL as an attractive indication for MOR208 after taking a first look at data from its Phase II trials, which are studying the drug in patients with non-Hodgkin's lymphoma and two forms of leukemia.
"First results of our ongoing Phase II trial, which we will present at this year's ASH conference in December, have helped to identify diffuse large B-cell lymphoma as a valuable development opportunity for MOR208," MorphoSys Chief Development Officer Dr. Arndt Schottelius said in a statement. The open-label, Phase II non-Hodgkin's lymphoma trial has recruited patients at sites across the U.S. and Europe.
Data from the trial could set MorphoSys up with a shot at late-stage development of MOR208, a rare unpartnered compound in the company's collaboration-heavy clinical pipeline. The human monoclonal antibody targets CD19, an antigen expressed in B-cell development. CD19 is expressed before CD20--the target of Biogen Idec ($BIIB) and Genentech's Rituxan--leading MorphoSys to predict it could treat a range of cancers.
- read the release
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Histide raised CHF 4.5 million ($4.7 million) to develop science it claims could enable the regeneration of tissue. Parter Capital Group led the Series A round in the Schindellegi, Switzerland-based startup. Release
ArGEN-X (EBR:ARGX) expanded its Phase Ib study of ARGX-110 to include patients with refractory CD70-positive T-cell lymphoma. The trial will enroll up to 30 patients with lymphoma and analyze the overall response rate. Release
Cellectis raised €13 million ($16 million) through the exercise of warrants. The Pfizer ($PFE)-partnered French biotech will use the cash to advance its therapeutic pipeline and plant science program. Release
A Danish court scheduled the hearing of NeuroSearch's (CPH:NEUR) appeal for September 2015. NeuroSearch is appealing a conviction for share price manipulation. Release
Glionova Therapeutics raised SEK 42 million ($5.7 million) in a Series A round to take its glioblastoma therapy into the clinic. Release
Biotest reported interim data from a Phase III trial of its hepatitis C drug, Civacir. So far, none of the patients receiving the higher dose have suffered a recurrence of hepatitis C after liver transplantation. The virus has re-infected more than one-third of the control group. Release
A Cambridge, U.K., science park received clearance to add 108,000 sq. ft. of R&D space. The site hosts Abzena (LON:ABZA), F-star and Kymab. Insider Media
Ziarco raised $33.1 million (€26.7 million) in Series B financing. The biotech is developing assets Pfizer ($PFE) dropped in the downsizing of its operations in Sandwich. FierceBiotech
Poland's Selvita stuck a deal with Felicitex Therapeutics to collaboratively develop personalized cancer drugs. Selvita is set to receive R&D funding, a stake in any resulting drugs and royalties if any make it to market. Release
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