Genentech binds onto NovImmune antibody
Let’s turn mythology upside down for a while and instead of David fighting Goliath, imagine David and Goliath as a team. NovImmune is David, a biotech company based in Plan-les-Ouates, near Geneva, with a staff of 70. Goliath is Genentech, the US giant - and subsidiary of the Roche Group - that is synonymous with the biotech boom, boasting a workforce of almost 10 000. But David and Goliath are teaming up now. On July 26th 2010, in the middle of the summer heat, NovImmune announced an exclusive licensing agreement with Genentech.
The deal covers a fully-human monoclonal antibody NI-1401, discovered by Dr Krzysztof Masternak, Head of Biology at NovImmune. The full financial details were not disclosed, but it is structured as a typical biotech deal in which the Swiss company was given an upfront payment and will receive development milestones, plus royalties on sales if the product makes it to the market.
NovImmune’s CEO, Jack Barbut, is very pleased with the agreement. First of all, the upfront payment will enable the company to finance further development of the six other molecules in the portfolio. Secondly, the deal validates the company’s approach. “Genentech usually makes agreements for technologies in development and seldom for a specific molecule. We consider this deal as a remarkable recognition of our work,” explains Barbut.Peer recognition
His satisfaction is all the greater for knowing that over many years Genentech has focused its own research on autoimmune diseases, such as rheumatoid arthritis or multiple sclerosis. The company launched Actemra, a new treatment for rheumatoid arthritis in 2009. As a result, this makes the US company a particularly good partner for NI-1401, which targets interleukin-17 (IL-17) immune system signalling pathways. IL-17 is implicated in a wide range of autoimmune diseases, including multiple sclerosis, arthritis and asthma. Given that its rivals Eli Lilly and Novartis both have drugs targeting IL-17 in the later stages of clinical development, it is an interesting strategic move for Roche, to in-license NI-1401, which is in preclinical development.
Genentech has now picked up responsibility for all further development of NI-1401. But that doesn’t mean NovImmune is idle. It expects to advance three of its six-strong pipeline of antibodies into Phase IIa proof of concept studies in 2011. One of these, NI-040, for the treating of Type I diabetes, will require the recruitment of over a hundred patients in a Phase II programme that is expected to last three to four years. The costs of this development alone is estimated at between 15 - 25 million Swiss francs.
Drug development is an expensive business. And this means that even though NovImmune has never had trouble finding finance, the agreement with Genentech is a blessing. The company was founded in 1998 by Professor Bernard March of the University of Geneva, an expert in the genetics of the immune response and inventor of the cDNA cloning process. Novimmune raised 15 million francs in seed funding in 2000 to get underway. It added a further 14 million francs in 2005, before going on to raise a commendable 58 million francs in 2006, and then - in the thick of the economic and financial crisis - another 62,5 million francs in 2009, in a transaction led by Zurich-based BZ Bank, its majority shareholder.Independent aspirations
“These different rounds of financing were a guarantee of liquidity until the end of 2010,” says Barbut. “Now the agreement with Genentech clears our road. Yet, it doesn’t mean we won’t need to carry out another round soon.” As ever in the unpredictable business that is biotech, the company has encountered expenses it didn’t expect. In 2006, Serono paid NovImmune 22 million francs upfront for rights of two of its antibodies. But when Merck acquired Serono, this deal was not considered to be strategic and was brought to an end. This prompted NovImmune to buy back the rights, for an undisclosed sum.
Partnerships are the key to the company’s future success, as more of its products move into expensive clinical trials. NovImmune still wants to retain some independence. But it recognizes it hasn’t shoulders broad enough to finance a product beyond the early stages of clinical development, given a ten-year timeframe, and costs that have skyrocketed to a staggering 1 billion francs.
Now, it is considering beginning research on Orphan diseases. “The fact is that development costs for molecules intended to treat Orphan diseases are usually lower,” states Barbut. “We hope to generate a successful candidate between 2013 and 2014.” NovImmune may land other partnerships, and an IPO remains on the agenda.
3 questions to Philippe Meuwly founder of Novipart
Why did you decide to start Novipart earlier this year?After some 15 years in the Bio-pharma industry at various positions at the highest levels I needed new challenges. Starting my own company was indeed the best way to use my dual education and experience in both the scientific and commercial fields. The vision of Novipart is “Quality and Innovation for the sustainable growth of our partners” as I strongly believe that activities in those two domains are key success factors. What is the market potential of support services offered by Novipart in Western Switzerland?Novipart is active in the field of life sciences with operational support on good practices (manufacturing, distribution, clinical and laboratory research) such as audits (internal, sub-contractors), training, validation, qualification and overall establishing quality systems. We also provide consulting advice to improve the organization through lean processes, best project practices and key performance indicators with a strong link between strategic and operational information. Finally, our business development tasks are to identify the best partners for the development and/or the promotion of the projects or products using a worldwide network of bio-pharmaceutical companies. The negotiation of term-sheet conditions and the establishment of contractual agreements are also offered. What type of specific support does Novipart provide to start-up companies?Start-up companies mostly focus their activities on fund-raising and R&D projects. Very rapidly they have a need to identify key partners to share the risks for the development of some of their molecules in their portfolio (licensing-out) and to subcontract the production of their product in a good medical practices environment as soon as human trials begin. Novipart helps those companies with our business development and quality support activities, as both tasks require specific expertise that start-ups cannot often afford to have in-house. Moreover, consulting advices on strategic positioning and portfolio management are also provided.