Fine Art of Partnering: Firms Seek Cash, R&D Help, Exposure
By Cormac Sheridan
BioWorld Today Correspondent
DUSSELDORF, Germany – Buoyed by Monday's series of workshops on the dos and don'ts of finding partners and striking deals (and learning to live with them afterward), companies attending BIO-Europe Fall 2011 rolled up their sleeves Tuesday and started in on what they had really come for: bare knuckle partnering. With 14,661 scheduled one-to-one meetings – and countless more unscheduled, impromptu exchanges – it's unlikely that any aspect of biotechnology will not receive an airing at this event.
For many smaller firms, in particular, the meeting represents a chance to pitch products and technologies to a global audience that may be more receptive than their home markets. Kenji Sekikawa, president of Preventec Inc., of Tsukuba, Japan, was forthright in his criticism of Japan's big pharma companies, and hopeful of finding a European or American partner to pick up his company's recombinant interleukin-10 (IL-10), which is produced in a genetically modified rice strain. As well as providing low cost of goods, Preventec's IL-10 is free of contaminating toxic material, such as trace amounts of bacterial endotoxin, which can influence the immune system's cytokine profile and hamper the efficacy of IL-10.
The technology has found no takers at home, however. "It's impossible in Japan," he told BioWorld Today. "Unfortunately Japanese big pharma companies are not interested in innovation," he added. "They are interested in [small-molecule] chemistry and antibodies – and that's it."
Anyone encountering Alec Mian, CEO of Genmedica Therapeutics SL, of Barcelona, Spain, will hear an intriguing case being made that the failure of the modern pharmaceutical industry to get to grips with diabetes lies in its over reliance on the target-based approach to drug discovery, which he called "the central dogma of the pharmaceutical industry" – as it flows directly from the Watson-Crick central dogma of molecular biology. "The industry is locked into that approach probably too heavily," Mian told BioWorld Today.
The best three drugs used to treat diabetes, metformin, sulfonylurea and insulin, predate that era, he said, while the target-based approach fails to take into account either the pleiotropic effects that can result from or the compensatory mechanisms that are triggered in response to a particular drug intervention.
Inflammation and oxidative stress are the two most important pathophysiological pathways in diabetes, Mian said. Genmedica scoured the literature for old reports on molecules affecting one or the other parameter, which also had some evidence of an effect on diabetes. Those formed the basis of a drug design and medicinal chemistry effort, which led to the creation of new drug molecules that have dual activity.
Genmedica tested those compounds directly in animal models, rather than in target-based or cell-based assays. It observed up to 80 percent protection of beta cells in animals, with downstream effects on dyslipidemia and glycemia as well. Its lead compound acts synergistically with metformin and with glucagon-like peptide-1 analogues, suggesting, Mian said, that a truly new, if unknown, mechanism of action is at work. Human microdosing experiments indicated that it is absorbed and metabolized appropriately, and Genmedica is gearing up now for Phase I and Phase Ia trials, which will begin next year.
Finding partners to back that approach can be difficult, however, Mian said, when he tells them that "we don't really have a single target, and the mechanism of action is unknown."
"It takes a while to convince pharmaceutical companies that the data speaks for itself," he said. Yet around 30 percent of new drugs approved every year do not have a known mechanism. "It's not as important as we might think – even on a scientific or a regulatory level." Clinical data are more significant.
Mian previously founded Boston-based microfluidics firm Gamera Biosciences Corp., which Männedorf, Switzerland-based Tecan Group AG acquired in 2000. Moving from what is arguably the venture capital (VC) capital of the world to Barcelona, which is on Europe's biotech periphery, has had consequences, however. The company has raised around €7 million ($9.6 million) from local sources, Mian said, around half of which it closed during the summer, but attracting other European VCs has proved difficult. "Many European VCs consider Barcelona closer to the north of Africa than to Europe," he said.
For Juhani Lahdenperal, CEO of Helsinki, Finland-based Hermo Pharma Oy, getting beyond the local VC scene is also key to his company's development. "Locally in Finland, the VCs are at the seed level, and there are not so many doors available," he told BioWorld Today. Agreeing on a valuation – and on how to compute a valuation – also is an issue. "They use discounted cashflow valuation tools, and this market is using net-present-value tools," he said.
The company has just received a termsheet on a potential €1.4 million investment, and it aims to extend that to €5 million. It has begun recruitment into a 60-patient Phase IIa trial of HER-801 in adult patients with a visual defect called amblyopia, which results from damage in the visual cortex. "The visual experience is poor, even with eyeglasses or laser surgery, because the visual cortex can't process the information," Lahdenperal said. HER-801 actually comprises a combined drug and device therapy, which employs the antidepressant drug fluoxetine – best known as Prozac – and an undisclosed rehabilitative training system. The rationale for using fluoxetine is to improve neuronal plasticity. "It allows those neurons to look for new contacts again," he said. The treatment period is expected to be 12 weeks, which, he said, should minimize side effects.
Schlieren, Switzerland-based Molecular Partners AG already has jumped the first hurdles in its development pathway, having raised CHF64.5 million (US$72.6 million) in venture capital and another $45 million up front as part of a potential $420 million deal in ophthalmology with Allergan Inc., of Irvine, Calif. (See BioWorld Today, May 5, 2011.)
The company is commercializing an alternative scaffold technology, which spits out protein binders called DARPins, which are smaller and more flexible than conventional antibodies. "There's a lot of focus on execution at the moment," CEO Christian Zahnd told BioWorld Today. "We need to be clear that we're adding value and not just spending money."
The meeting continues through Wednesday.
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