BioWorld International Correspondent
LILLE, France - At least one player in France has the muscle to swim against the tide in biotechnology financings and buy into an American firm to achieve its strategic goals - the French government.
A state-owned company, the Laboratoire Francais du Fractionnement et des Biotechnologies SA (LFB) in October 2006 purchased a 20 percent share of GTC Biotherapeutics Inc., of Framingham, Mass., for $25 million in three installments as part of a strategic agreement for joint product development and exclusive distribution rights.
France is now the largest shareholder in publicly traded GTC (NASDAQ:GTCB). The status of the collaboration and LFB's longer-term strategy for international development were discussed at the EuroBIO conference last week, as part of a presentation on biotech-to-biotech alliances as an alternative to the dominant biotech-to-pharma deals.
The deal gave GTC exclusive marketing rights in the U.S. and Canada for products emerging from joint development while LFB holds exclusive marketing rights in the European Union. GTC and LFB hold co-exclusive marketing rights to the rest of the world.
According to Marc Pennacino with LFB, each partner gave to the other exclusive licenses to relevant intellectual property and know-how for development and commercialization of products.
The partners also agreed to share costs, investments and profits "under rules for each area and governed by principles that I can not disclose," he said.
LFB's investment in GTC stock "is not part of the joint project but an outright stock purchase to give GTC the capital it needs to grow the company," he said.
The first program in the collaboration is development of a transgenically produced recombinant form of human factor VII a (rhFVIIa), a clotting factor for the X-linked (male) genetic disorder that will treat Type A hemophilia and may treat Type B with potential secondary uses for trauma and uncontrolled bleeding.
LFB has demonstrated production of FVII in transgenic rabbits, and GTC's transgenic production platform is capable of larger volumes than cell culture bioreactor facilities.
LFB and GTC said they intend to become the low-cost producer of rhFVIIa, noting that the current product on the market, NovoSeven, from Bagsvaerd, Denmark-based Novo Nordisk A/S, is high in price yet enjoys strong market growth. Sales doubled from $400 million in 2000 to $800 million in 2005, and the estimate is for $2 billion in 2012, Pennacino said.
Another product announced by the partners is a transgenically produced CD20 monoclonal antibody. The resulting product is expected to have a target specificity similar to Rituximab but with a relatively higher antibody dependent cell-mediated cytotoxicity.
The CD20 antibody may be considered for clinical development as a follow-on biologic in the U.S. and a biosimilar in the EU as the appropriate legislation is enacted and regulatory guidance is established.
LFB created a subsidiary, LFB Biotechnologies (LFB-B) in September 2006 as a legal framework, allowing it to operate outside of France and to enter into agreements, such as setting up a production facility in Brazil for plasma-derived proteins.
LFB supplies 20 plasma-derived products, 50 percent of which have trauma applications, to 1,000 hospitals in France and 40 hospitals in the UK and Germany. LFB reported 2006 sales of €310 million (US$432.2 million) and employs 1,300 people. The state-owned laboratory reports to both the French ministries of health and the economy.
"This strategic alliance between GTC and LFB assembles all the assets and skills for a worldwide success for transgenically derived blood factors and monoclonal antibodies, and this collaboration offers a unique opportunity to meet worldwide expanding patient needs with a technological breakthrough," said Evelyne Nguyen, director of financial affairs for LFB-B, during the Lille presentation.
The LFB-B subsidiary has 28 employees and a research and development budget of €40 million that is being boosted to €50 million for 2008, she said. The subsidiary expects to have 200 employees.
"The challenge to LFB is international growth," Nguyen said. "Our goal is to double the current level of sales over two years and then to reach €150 million by 2012."
GTC develops, produces and commercializes therapeutic proteins through the production of recombinant proteins in the milk of transgenic animals.
"Transgenic production offers potentially critical advantages in the production of recombinant proteins," Rick Finnegan, GTC vice president of commercial development, told the EuroBio audience.
He said creating a herd and providing appropriate dairy facilities can be accomplished with substantially less cost than building a bioreactor. In addition, expanding to meet future needs can be accomplished with a higher degree of flexibility in the timing of the deployment of capital.
GTC consistently has achieved high expression rates with recombinant proteins, he said. High protein expression levels in transgenic animals, concentrated raw materials, efficiency in purification and efficient capital spending all contribute to a highly cost-effective transgenic equation. As a result, the cost of a transgenically derived product is, in most cases, substantially lower than that of a cell culture product.
The subsidiary LFB-B also announced at EuroBio that it has acquired 51 percent control of MAbgène, a biotech company based in Alès, France, to scale up its biomanufacturing capacity for the production of recombinant proteins and monoclonal antibodies through cell culture techniques.
LFB-B said it will scale up the site, which features a pilot development unit and a clinical batch production facility, to "a truly industrial dimension and manufacture commercial batches of biomolecules." LFB-B said its long-term objective is to acquire all the capital in MAbgène.