Medical Device Daily
Riding high on its success in supplying paclitaxel drug technology to Boston Scientific (Natick, Massachusetts) for that company’s Taxus drug-eluting stent, Angiotech Pharmaceuticals (Vancouver, British Columbia) yesterday reported the launch of a new venture investment and “venture relationship development and management” unit.
Additionally, it reported the sign-on of yet another company as a licensee for its paclitaxel technology, for broad uses on medical devices.
Dubbed ADDVANCE – for Angiotech Drug Device Venture and Capital Enterprises – the new venture funding unit represents an effort to attract early stage med-tech companies that would link up well with Angiotech’s drug/device efforts, said Todd Young, vice president of investor relations and communications for the company.
“We’re sitting on a bit of cash,” Young told Medical Device Daily, his voice emerging via cell phone from the hubbub of a New York hotel where the company was presenting its story to analysts.
In a press statement, the company said it looks to put venture funding of up to $50 million into emerging med-tech firms over the next three years.
Targets for the funding, Young said, will be early stage organizations likely to mesh with the Angiotech’s drug/ device focus – as well as drug/biologics combinations – while, in return, helping to build Angiotech’s already well-developed intellectual property portfolio.
Other than the match-up with Angiotech’s portfolio, he said there will be no geographical or technological restrictions for the companies funded, though he pointed to “orthopedics and vascular intervention” as choice opportunities.
He emphasized the relative autonomy that ADDVANCE will have.
“[W]e’re really committed to creating an internal venture group that acts semi-independently, that has its own personnel that runs the venture group,” Young said.
ADDVANCE also will pursue outside collaborations or joint ventures, or establish, fund and spin off new companies, along with selected outside venture capital investor partners, Angiotech said in its statement.
“These opportunities will pursue selected Angiotech research programs or product opportunities that may benefit by being developed and funded by an entity independent of the parent organization,” it said.
It said that its completion, nearly a year ago, of a $25 million equity investment and establishment of a distribution relationship with Orthovita (Malvern, Pennsylvania) is a model for this type of opportunity (MDD, June 6, 2004).
Orthovita, a developer of orthopedic biomaterials, sold somewhat more than 5.68 million shares of its common stock to Angiotech for gross proceeds of $25 million.
The companies also signed a sales and distribution agreement to share North American rights to Angiotech’s Costasis product, and they are working together to reposition Costasis for use in spine and orthopedics surgery under the brand name Vitagel.
“Our relationship with Orthovita has enabled a more rapid commercialization of the Vitagel surgical hemostat biomaterial than [we] would have achieved independently,” the company said.
William Hunter, MD, president and CEO of Angiotech, said that ADDVANCE would provide “a focused vehicle to reach out to the venture capital community and the exciting development stage companies they fund with both our substantial technology portfolio and capital resources.”
He added that Angiotech scientists have discovered “a substantial universe of new uses for existing pharmaceuticals in local applications, including in drug-device combinations. We also have several technologies and products where no exact fit exists with our evolving product development and commercialization efforts, but nonetheless could represent significant value for our shareholders.”
Hunter described the venture-funding effort as a way to open Angiotech’s “research architecture to development stage companies and the venture capital community and . . . unlock what we believe are latent values in our research and intellectual property portfolio more rapidly.”
Angiotech also reported yesterday its newest license agreement with Broncus Technologies (Mountain View, California), a developer of interventional bronchoscopy devices.
The license accord allows Broncus to incorporate Angiotech’s paclitaxel technology with its own Exhale system used to treat emphysema.
Warrants for Broncus preferred stock will serve to cover up-front and milestone payments, with a royalty on sales of eligible products, Angiotech said.
The Exhale system, used in airway bypass procedures, is designed to reduce the hyper-inflation in patients with emphysema “by creating extra-anatomic passages that allow air to pass from hyper-inflated areas of the lungs directly into larger airways and, ultimately, out of the body,” Broncus said.
The license to Broncus is a worldwide, non-exclusive relationship, specifically for pulmonary disorder-COPD-related diseases.
Angiotech said that preliminary results indicate that paclitaxel improves the duration of benefit of the airway bypass procedure.
The companies reported that, to date, more than 25 patients have been treated with paclitaxel-loaded implants using the Exhale system, with clinically significant improvements demonstrated in key pulmonary function tests and quality of life endpoints.
Broncus said it is currently conducting feasibility studies at several international sites and plans to start a pivotal study in the U.S. in the first half of 2006.
Jeanne Bertonis, chief business officer of Angiotech, said, “We expect the Exhale system for airway bypass to fuel the expansion of a new medical sub-specialty called interventional pulmonology in much the same way PTCA catheters and stents formed the foundation for the extraordinary growth of interventional cardiology . . . This is another example of extending licenses to early stage companies, and realizing the importance of our extensive intellectual property portfolio and know-how in the area of local delivery of paclitaxel.”
Cary Cole, CEO of Broncus Technologies, said, “We are devoted to developing the best treatment possible for emphysema patients and believe we will accomplish this by combining Broncus’ and Angiotech’s technologies.”
An estimated 60 million suffer from emphysema worldwide, including 3 million in the U.S. Emphysema-related healthcare costs are estimated at $7 billion a year in the U.S.
Angiotech is focused on combining pharmaceuticals with medical devices and biomaterials to address the complications associated with the implantation of medical devices and the effects of various diseases.
Privately-held Broncus Technologies develops interventional bronchoscopy devices for the treatment of emphysema.