Okairos – 2012 Fierce 15

Riccardo Cortese, CEO of Okairos

Based: Basel, Switzerland
Founded: 2007
CEO: Riccardo Cortese
Focus: Genetic vaccines
Website: www.okairos.com

The Scoop: Okairos has built a pipeline of next-generation vaccines with the biotech startup's deactivated chimp viruses, aiming to deliver genetic material to cells to elicit powerful CD8 T cell action rather than antibody responses like most vaccines. The Merck ($MRK) spinoff has ambitiously applied the adenovirus vector-based platform to some of the most nettlesome infectious diseases on the planet, such as HIV, hepatitis C, malaria, flu and respiratory syncytial virus (RSV). Add malignancies to the group's list of targets, too. With the potential to deliver new vaccines where others have failed, the company raised €16 million in a Series B round of venture capital two years ago from the VC units of drug giants Novartis ($NVS) and Boehringer Ingelheim as well as from traditional firms Versant Ventures, BioMedPartners and Life Sciences Partners.

What Makes it Fierce?

For Big Pharma, the prophylactic vaccine business traditionally offers a predictable if modest source of revenue without the fireworks of drug R&D that can result in blockbuster wins and miserable losses. Yet the past decade or so has brought renewed enthusiasm about the business with big-sellers, such as U.S. pharma Merck's HPV vaccine Gardasil, and new vaccine platforms with the promise to thwart some of the most sinister infectious diseases. Okairos fits squarely in the latter category of next-gen players with the potential to deliver blockbusters down the road on par with Merck's major seller.

The Swiss biotech, which spun off from Merck in 2007, grew from the work founder Riccardo Cortese and his team did on screening more than a thousand biological samples for vectors with ideal properties for human vaccines. They isolated adenovirus vectors from chimpanzees that afforded the ability to avoid detection from natural immunity in humans, enabling the deactivated virus to operate long enough to elicit powerful T-cell responses in the body. Investors, charities and government agencies have placed bets that Okairos has the secret sauce to create an army of vaccines to defend against some of the largest threats to global health. And the company believes that its vaccines can be deployed as cancer therapies.

Okairos' hepatitis C vaccine offers a bold new approach to combating the virus that afflicts an estimated 170 million people worldwide and is a leading cause of liver cancer. Backed by grants from the National Institutes of Health, the biotech launched a mid-stage study of its vaccine in patients at risk of contracting hep C, which can infect people who receive transplants or take illicit drugs intravenously. In an earlier study, the vaccine wiped out the virus in 1 of 5 patients with early hep C infection, Bloomberg reported.

The hep C vaccine candidate provides a unique potential option to spare patients who get the disease from the harsh side effects of interferon injections, which are taken in approved treatments for the liver-damaging disease. Gilead Sciences ($GILD) laid down $10.8 billion to buy Pharmasset last year and take a lead in the race to develop interferon-free regimens against the disease. (Bristol-Myers Squibb ($BMY) squandered a fortune on a similar bet, buying Inhibitex for $2.5 billion and then writing off most of the purchase after toxicity alarms rang on the lead asset in the deal.) Okairos finds out results from the vaccine study within the next year, Cortese says. And success could generate some serious pharma interest.

Yet Cortese seems even more enthusiastic about hitting initial human studies for the company's RSV vaccine later this year.

RSV vaccine "is a major medical need because the number of deaths in newborn infants is very high and there is no vaccine," Cortese says. "The only available defense against RSV is an antibody that can be given only to a very discrete number of people … and is not very efficacious and by definition is very expensive. A vaccine is a holy grail of pediatric vaccine that is unfulfilled."

Cortese and his Okairos counterparts come with some serious biopharma cred. They previously founded Italy's Institute for Research in Molecular Biology (IRBM), which Merck bought after the group discovered the HIV fusion inhibitor Isentress. Merck, which still markets Isentress, has since let go of the IRBM operation. Okairos shares a manufacturing facility with IRBM in Italy, where the Swiss biotech conducts its R&D activities.

Investors: Novartis Venture Funds, BioMedPartners, Boehringer Ingelheim Venture Fund, Versant Ventures and Life Sciences Partners.

-- Ryan McBride (Email | Twitter)

Okairos – 2012 Fierce 15

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