Plexxikon Inc. scored its first corporate partnership, hooking up with Genentech Inc. to produce leads to a supplied target.
The deal was signed in part because Plexxikon was "looking for a match where we could contribute with our technology," said its CEO, Peter Hirth, as well as because the company was searching for "a partner that would bring a strong development and marketing prowess," said its chief financial officer and president, Kathleen Glaub. And it didn't hurt that Glaub served as Genentech's treasurer for five years.
"I'm sure it helped," she told BioWorld Today. "We've always said, Deals are made between people, not companies.' Relationships are very important."
Plexxikon, of Berkeley, Calif., will use its Scaffold-Based Drug Discovery platform to develop "a series of protein lead compounds," Glaub said, against an undisclosed gene target in the protein kinase family. The details of the financials were not disclosed, but Plexxikon is scheduled to receive an up-front technology access fee plus research funding. It will aim for discovery and clinical milestones and would receive royalties on anything that Genentech, of South San Francisco, commercializes.
While the actual figures were not disclosed, Glaub called the funding "significant."
"We have a target of covering 40 percent of our expenses, and this will go a long way toward achieving that," she said. "We are confident that we will hit our goals this year in terms of revenue."
The company closed its Series B financing round last year, having raised "just over $31 million," Glaub said, adding that "without any partnering, that will get us well into 2004. With partners like Genentech, it will push it out even further." (See BioWorld Today, April 17, 2002.)
The company expects to start a Series C round at the end of 2003 or early in 2004.
Plexxikon's scaffold-based platform is designed to discover drug leads derived from its initial discovery of chemically tractable scaffolds. Scaffolds are chemical entities that interact with an active binding site, which is conserved across a protein family. Plexxikon is working with three protein families - kinases, phosphodiesterases and nuclear hormone receptors - and has preclinical data from all three.
"We are not a technology company," Hirth told BioWorld Today. "We are a platform company on one hand, but one that takes its platform and transforms it into product opportunities." He added that the company would move to Phase I when it has the right clinical candidate.
"We want to make solid decisions before we go to the clinic," he said.
As things develop further, Plexxikon "will be opportunistic" concerning its partnering, Hirth said.
"We've been talking to a lot of parties out there," Hirth said. "We are confident that we will generate additional revenue through partnerships, but that's also attractive from a business model perspective."
The company, Hirth said, understands the sizable costs associated with clinical development, so it will develop certain compounds with partners and possibly keep others in-house. But all that's ahead. For now, Plexxikon can take pride in the fact that its first partner is riding high.
In the past week, Genentech has received a unanimous vote from an FDA panel for the allergic asthma product Xolair and reported impressive trial news from a Phase III study of Avastin in metastatic colorectal cancer. The Avastin news not only appears to have validated the drug, but also gives credence to anti-angiogenesis technology in cancer. Genentech's stock rose $16.95 Monday, or 44.7 percent, on the trial report. (See BioWorld Today, May 16, 2003, and May 20, 2003.)
"We're very excited because Genentech has always been sticking to its guns as to a high standard," Hirth said. "They have an in-depth understanding of what we do. Especially after the events of the past few days, they have a high profile and we like this [deal] even better, being part of that successful story."