Pfenex - 2011 Fierce 15

Pfenex
Based: San Diego
Founded: 2009
Website: www.pfenex.com
CEO:
Dr. Bertrand Liang

The Scoop: Therapeutic proteins are tough to make. For starters, there's a lot of time and money spent on developing a strain of an organism--such as a bacterium or yeast--to express quality recombinant proteins efficiently. Biotech upstart Pfenex has found big business opportunities in alleviating the pain of this process for stakeholders in the life sciences industry. And the company, which formed through a spinout of protein expression technology and assets from Dow Chemical ($DOW), has rapidly landed a variety of commercial deals since its inception in late 2009.

What Makes It Fierce: Pfenex not only offers customers in the life sciences industry a technology for efficiently identifying an optimal strain for protein expression, but the start-up has managed to establish four business units to tap the maximum potential of its system. That puts a lot of balls in the air for the upstart's executive team to juggle, but the group has demonstrated success on those multiple fronts.

The company's multi-pronged commercial strategy provides income streams in the present and the potential for big upside growth in the future. That sort of balance is rarely seen in young biotech companies. For example, the company sells reagents that make use of its ability to produce hard-to-make recombinant proteins. It works on a contract basis for drugmakers to engineer the optimal microbial strains and fermentation processes for manufacturing therapeutic proteins such as antibody fragments and vaccine antigens. It also generates income through licensing pacts with large outfits such as Merck ($MRK), which tapped Pfenex's technology to produce proteins for the drug giant's vaccine development. Pfenex is also working on strains for making biosimilars and vaccine antigens for its own product pipeline.

In addition to Merck, the company's impressive roster of industry partners now includes other big names such as Bristol-Myers Squibb ($BMY), Boehringer Ingelheim, Sanofi ($SNY) and MedImmune, according to Pfenex.

"I've never seen anything more efficient than this technology," said Dr. Bertrand Liang (pictured), the company's CEO, and a former employee of major biotech drugmakers such as Amgen ($AMGN) and Biogen Idec ($BIIB). "And knowing how much of an unmet need there is for this in the industry, that is what drew me to the company."

The company's technology involves the use of engineered bacteria based on a microbe called Pseudomonas fluorescens. Given a target gene, the company uses a high-throughput process to rapidly test thousands of different strains to identify the ones with the greatest capacity to express high-quality proteins. By testing many strains in parallel with the use of robotics and other technologies, the company can move through the strain engineering process in about 5 weeks, Liang said. Then it takes roughly the same amount of time to finely tune proper fermentation conditions for manufacturing proteins.

The bottom line is that Pfenex's approach provides huge advantages over the traditional iterative methods that can take more than a year to find a winning organism to meet a manufacturer's protein-expression needs. And, as Genzyme's woes of recent years have made clear, manufacturing delays can cost biotech firms many millions of dollars in lost revenue. Pfenex says that the cost of biologics manufacturing delays is about $1 million per day.

Pfenex also prides itself on applying its technology to express proteins that have been difficult to produce with other approaches. For example, the company has developed a process for making batches of an antigen called circumsporozoite protein, which is useful for the development of malaria vaccines. Previous protein expression methods had failed to yield ample amounts of the antigen, according to Pfenex. Now the company sells the antigen to the research community and helps in the development of much-needed malaria vaccines.

Uncle Sam has also taken an interest in the company's approach to protein expression. The U.S. government's Biomedical Advanced Research and Development Authority (BARDA) tapped Pfenex last year to develop a strain for producing an antigen for anthrax vaccine under a contract worth up to $18.8 million. The company is also working with the NIH on a malaria vaccine program.

Pfenex's technology wasn't a fit for Dow's commodity chemical business, Liang explained, leading to the spinout of the company with the backing of venture firm Signet Healthcare Partners (the CEO did not disclose the amount of Signet's investment in his company). Yet the firm's technology has been a great fit for the unique needs of its partners and customers in the biotech game. The Pfenex team deserves kudos for executing a strategy that derives value from the protein expression technology in multiple ways.

Venture Backer: Signet Healthcare Partners

Pfenex - 2011 Fierce 15
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