SHANGHAI – Adagene Inc., of Suzhou, has raised $8 million in series A financing from a consortium of backers, including Fidelity Biosciences, Fidelity Asia Growth and Wuxi Venture Fund, an investment vehicle for Wuxi Apptec. First established in 2011, Adagene, an antibody discovery company, has been quietly developing its technology and is gearing up for its next stage of development.
"Adagene has pioneered new methods of antibody design and construction to make simple things easy and difficult things possible," said Peter Luo, co-founder and CEO of Adagene. "We continually build new libraries to explore important underrepresented and novel target spaces, with very high fidelity between design and construction."
While the company looks to provide antibodies with enhanced, drug-like qualities to clients, it also is committed to developing an internal pipeline focused on novel immune checkpoint targets and target combinations.
Luo, a serial entrepreneur, brings to China his experience as chief technology officer at Abmaxis Inc., an antibody discovery company he co-founded in Santa Clara, Calif., that was acquired by Merck & Co. Inc. for $80 million. (See BioWorld Today, May 10, 2006.)
His latest venture offers an alternative to mice- or yeast-based antibody generation (such as used by Adimab LLC), using computational technology to develop a synthetic library opening previously complex target classes to monospecific and IgG-like bispecific antibodies.
"We are building from scratch a discovery engine for antibody discovery which integrates computational design, screening and library construction," Luo told BioWorld Today. "To do this right you have to have enough people fully dedicated to do the very detailed work, which can be a challenge if you don't have enough manpower to do so."
The venture funding will be used to hire more people and further equip the lab, according to Ed Hu, chief financial officer and chief investment officer of Wuxi Apptec and longtime friend of Luo.
Hu said that it took some convincing to encourage Luo to leave his position at Merck and set up shop in China, but since his return Luo has been able to build a library of more than one thousand billion (1011) unique molecules.
Luo was also influenced by another longtime friend, Ge Li, founder of Wuxi Apptec and co-founder at Adagene whom he has known since graduate school days at Columbia University.
"He was a very outstanding student and has a style of doing things that was very similar, using a lot of computational tools and a lot of experiments," Luo said of Li. "Scientifically, we share very similar visions on how to get things done.
"Ge has been a pioneer, showing how you can build a formidable organization [Wuxi Apptec] to support big pharma and biotechs in drug discovery efforts and has been very successful showing you can do this based in China," Luo added.
Wuxi Apptec, recently the recipient of the Scrips award for best company in an emerging market, promises to offer synergistic value to Adagene. Typically known as a contract manufacturing organization for its biologic manufacturing and small-molecule CRO work, Wuxi Apptec has set it sights on being a leading open-access R&D capability and technology platform company serving the industry in China and the U.S.
PARTNERING THE NEXT STEP
Adagene's antibody platform technology, which the company calls Dynamic Precision Library (DPL), sets out to exponentially increase the epitope space through the discovery and development of antibody therapeutics.
Epitopes are the binding sites on a protein. Identifying those sites, or epitopes, of antibodies on their target antigens assists in the discovery of new therapeutics. The company said its technology helps companies get to results faster, leading to higher affinity and specificity of primary hits with broad epitope coverage.
According to Luo, the firm spent the first two years working hard to build up its capabilities; earlier this year, it began the process of seeking partners. "We are sharing our data and people are impressed about what we have achieved so far," he said.
The antibody service is set to generate revenues for the company. While some have already been trickling in, the next stage will be to secure a deal with a multinational corporation. According to the company, several deals are in the works, but Hu said Adagene is constrained by partners' wishes not to divulge details.
Looking ahead a few years, the most likely exit for investors is a possible M&A like Abmaxis' deal with Merck. Another possibility, given the potential to be profitable, would be a listing on the stock market in China.
There will be cost advantages to working with Adagene, compared to companies in developed markets. Although that may not be enough to entice China's pharmaceutical companies to line up for the service, since, coming from a history in generics, they are slow to get involved in discovery and reluctant to pay royalties.
"Domestic companies like to buy something that is certain," Hu said, so Adagene is looking at business models better suited to the Chinese context, floating one possible solution that would involve generating antibodies and then selling the programs outright.
But in the meantime, said Hu, "the initial market for Adagene will be international companies and a few select companies who want to go after new targets."