UPDATED: VCs' new biotech offers PhIII R&D partner for Big Pharma

Encouraged by the success of SFJ Pharmaceuticals in finding late-stage pharma assets that can be partnered and fast-tracked in Asia, Clarus Ventures and Abingworth have launched a new biotech drug developer with similar plans for the U.S. and Europe. Lewis Cameron, a seasoned CRO exec with stints at Chiltern International, Clearstone and LabCorp, will head up the London-based venture, which has set out to strike co-development deals on Phase III drugs.

The business model is simple: Find late-stage assets at Big Pharma or Big Biotech companies and partner on a plan that puts Avillion in charge of pivotal studies and regulatory approval. No financial terms were announced, but the capital demands will be spurred as deals are done and assets are put into new studies.

Cameron explained to FierceBiotech this morning that Avillion will pay the full freight for drug trials ranging from $50 million to $100 million, looking for a return based on regulatory approval. And the prearranged payoff can be paid as either a lump sum or out of the royalties from an approved product. The developer is "agnostic" in terms of disease categories, he adds.

"Pharma and larger biotechs have a plethora of Phase III assets and they can't really fund them all," says Abingworth partner Genghis Lloyd-Harris. By taking on these drugs the Avillion model effectively expands their R&D budgets, which can be constrained, while sharing the risk of development. Cameron says the company has been incubating now for 9 months and talks are already underway with prospective partners. He hopes to have his first deal done in the fourth quarter and says that the Avillion team--which will be working with colleagues in the CRO field--can handle three to 5 programs at different stages of development.      

Clarus and Abingworth have invested tens of millions of dollars on SFJ, which recently completed its second deal with Pfizer ($PFE) for a late-stage program for the lung cancer drug dacomitinib. That followed a deal on Pfizer's Inlyta (axitinib) and another one for Eisai's thyroid cancer drug lenvatinib. Great potential can't obscure the risks inherent in drug development, though, as Pfizer helped underscore with the news that Inlyta failed a late-stage test for kidney cancer. The miss, though, was close, which helped keep hope alive at Pfizer--and presumably SFJ.

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