The Scoop: "MerLion got started in natural product development when the field was out of fashion, and has benefited from a global comeback. With an international development team and a global perspective, this is one company to watch closely."
What makes it Fierce: Five years ago, when Glaxo Wellcome and SmithKline Beecham were merged into the GSK powerhouse, their natural products collection was declared a non-core asset and put up for sale. But one drug company's reject became part of the foundation of MerLion in Singapore.
MerLion combined those assets with the product sample collection at the Centre for Natural Product Research at a time when natural product candidates were being outshined by hotter technologies.
"It's the cyclical fashion," says MerLion CEO Dr. Tony Buss. "It goes back to the '90s when combinational chemistries first developed." But when the technology failed to deliver, natural products came back into vogue--and MerLion has been well positioned for the comeback.
MerLion's approach has been to partner up with an international collection of drug companies while pushing its own portfolio of anti-infectives into and through the clinic. It's achieved both aims, inking deals with the likes of Merck, Astellas, Schering-Plough, the Novartis Institute for Tropical Diseases and more. Buss frankly acknowledges that the up-fronts and milestones and royalties won't make the company profitable anytime soon, but there is some cash flow to bank on as it gets closer to bigger deals when Phase II products can be licensed out and regional commercialization work can get underway following a late-stage study.
MerLionâ€™s two lead candidates are Friulimicin, which could emerge as second in class to Cubicin, a successful antibiotic developed by Cubist, and Finafloxacin, an experimental therapy aimed at treating Helicobacter pylori infections, which are prevalent worldwide and particularly so in Japan.
What to look for: MerLion raised $30 million in its latest venture round--$48.5 million in total--buying the company enough of a runway to make it to the end of 2008, when it expects to have Phase II efficacy data on its lead candidate. At that point, the company could go public on the Japanese or a European exchange, or, who knows, maybe get bought up itself. MerLion made two strategic acquisitions in Europe last year, and it's still in the market for a promising anti-infective - provided the Big Pharma players don't price out the market.