Royalty Pharma backs risk-friendly researcher Avillion

Avillion, a contract researcher that teams up on late-stage drugs in exchange for a cut of profits, has added the complementarily focused Royalty Pharma to its investor syndicate, joining VCs Abingworth and Clarus Ventures.

Royalty, which makes its money by buying stakes in promising drugs, has made an undisclosed investment in Avillion, and Jim Reddoch, Royalty's executive vice president for research and investments, will join the London researcher's board.

Abingworth and Clarus launched Avillion last year with the goal of becoming the co-development partner of choice for drugmakers, the two said. The company scouts for late-stage assets that are between $50 million and $100 million from the finish line, taking on the front-end risk with the promise of a either lump sum or royalties from its partner.

Royalty, with its 17 years of experience picking winners, will help Avillion move forward with that model, CEO Allison Jeynes-Ellis said.

"Royalty Pharma's input will be invaluable as we seek to identify and accelerate the development of promising product development candidates, taking them through Phase 3 clinical development to marketing approval, beginning with Pfizer's Bosulif (bosutinib)," Jeynes-Ellis said in a statement.

Under that Pfizer ($PFE) deal, signed in January, Avillion will pay for and conduct a late-stage study of the chronic myelogenous leukemia-treating Bosulif to support an FDA application to get the drug approved as a first-line therapy. The oral treatment is already cleared for patients who have failed prior therapy.

Risk-sharing arrangements--in which CROs stretch beyond the usual contractor relationship and take a financial stake in a drug--are becoming more and more popular in the drug development world, including WuXi PharmaTech's ($WX) partnership with Ambrx, inVentiv Health's collaboration with Oncobiologics and Ergomed's co-development tie-up with Cel-Sci ($CVM).

- read the statement