BORNHEIM, Germany ¿ Altana AG invested about EUR34.2 million (US$30.7 million) in GPC Biotech AG, or 8.3 percent of the company.
Altana, of Bad Homburg, Germany, said its purchase of 1.69 million shares underlines its belief in GPC Biotech¿s long-term growth perspectives with regard to the discovery and development of innovative drugs. The investment also strengthens the long-term relationship with the biotech company, Altana added.
The proceeds further improve Martinsried, Germany-based GPC¿s cash position. ¿Even before the Altana equity investment we have been in a very strong financial position,¿ GPC CEO Bernd Seizinger told BioWorld International, adding that at the end of June GPC had EUR105.4 million cash in the bank.
¿Cash is king in biotech; nobody knows whether it will be possible in the near future to go back to the equity markets, which continue to be in bad shape,¿ Seizinger said. ¿So it is very important for us to be in a strong financial position, to have long-term planning, without being forced to go back to the equity market.¿
GPC has a two-leg business strategy. The first leg aims at raising revenues from collaborations with biotech or pharmaceutical companies in target-finding and validation deals.
On its second leg GPC aims to create ¿much more aggressive upside potential for our investors in regard to development of an internal discovery and development pipeline,¿ Seizinger said.
GPC plans to use its cash to build its internal drug discovery and development pipeline more extensively, particularly in oncology, he said. ¿We have systematically expanded the infrastructure for our internal clinical development in Princeton, N.J. We hired Marcel Rosenczweig, who was formerly head of worldwide clinical development at [the pharmaceutical company] Bristol-Myers Squibb for therapeutic areas including oncology,¿ Seizinger said. ¿Rosenczweig brought seven oncology drugs through clinical development onto the market,¿ Seizinger explained, adding, ¿[Rosenczweig] was also the mastermind behind [the cancer drug] Taxol.¿
In addition to its internal oncology program, GPC runs preclinical projects in the fields of immunology and anti-infectives.
Using its cash, the company also wants to fill up its pipeline by in-licensing oncology compounds that already are in the clinical or late preclinical development stages.
¿We are less interested in just in-licensing regular cytotoxic drugs, but we are more interested in compounds with a novel mechanism of action,¿ Seizinger said.
After the investment, GPC this week announced the acquisition of clinical and preclinical compounds for cancer treatment.
Arizona State University granted GPC an exclusive license for further development of Bryostatin-1, which is in Phase II trials for treatment of several kinds of cancer. Early results in trials related to esophageal cancer indicated enhanced efficacy of Taxol when administered in combination with Bryostatin-1, GPC said.
If the current studies prove successful, GPC plans to perform Phase III clinical trials of the combination therapy for esophageal cancer.
In addition, GPC acquired an exclusive license from Stanford University to develop and commercialize ¿Bryologs,¿ or synthetic analogues of Bryosatin-1. They are in preclinical development.
¿Bryosatin-1 and Bryologs affect fundamental mechanisms of cancer development,¿ Seizinger said in a prepared statement.
Financial details of the deals on Bryostatin-1 and Bryologs were not disclosed.
¿Due to [our] pharmaceutical alliances our burn rate in the first six months of 2001 was only about EUR5 million,¿ Seizinger said.
GPC currently has two collaborations in target finding and validation with Altana¿s pharmaceutical subsidiary, Byk Gulden GmbH, of Constance, Germany. In 1999 they started a project on new targets related to treatment of the stomach ulcer bacterium, Helicobacter pylori. ¿This year we have reached several milestones in identifying novel targets for antibiotics against Helicobacter,¿ Seizinger said.
GPC also helped Byk identify the molecular mechanism of action on one of its lead compounds, he explained. ¿This was another milestone we achieved, due to our reverse genomics technology platform,¿ Seizinger said.
The collaboration with Byk on potential targets for antibiotics for GPC is worth up to $30 million, plus royalties. In January, GPC and Byk entered an additional collaboration on target finding and validation in oncology, which is worth up to $100 million, plus royalties. (See BioWorld International, Jan. 24, 2001.)
¿GPC Biotech has proved itself a reliable and competent partner, which builds the foundation for our entrance as a strategic investor,¿ Hans-Joachim Lohrisch, of Altana¿s managing board, said in a prepared statement.
GPC¿s collaborations include projects with Boehringer Ingelheim Research Center, of Laval, Quebec; Aventis Pharma GmbH, of Frankfurt; Bayer AG, of Leverkusen; MorphoSys AG, of Martinsried; Cell Genesys Inc., of Foster City, Calif.; and Karo Bio USA, of Durham, N.C.
GPC employs a staff of about 160, with about 45 percent of the staff in the U.S. GPC¿s facilities in Princeton and Waltham, Mass., focus on drug discovery and development. ¿In Princeton, we have our clinical development,¿ Seizinger said. ¿In Waltham, we have a lot of drug discovery going on. Our high-throughput screening and the medicinal chemistry group is in Waltham,¿ he added. At its headquarters in Martinsried, GPC has particular emphasis on new genomics and proteomics development.