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Blueprint Medicines: a start-up to watch in Boston receives $40M in funding

By Pieter Droppert on April 11, 2011

The Boston Globe today reported that Blueprint Medicines had received $40M in Series A venture funding.

The VC funding from Third Rock Ventures to the Boston/Cambridge based company is reported to be the largest early-stage funding for a New England life sciences start-up.

Many thanks to @rndubois for his tweets about this that drew it to my attention. You can read more about the financing in Blueprint’s press release.

What makes this exciting news? First it adds to the growing reputation of Boston/Cambridge as a hot-spot for cancer research. Blueprint Medicines will be focused on translational medicine and the development of new kinase inhibitors for the treatment of cancer.

Secondly, it confirms what is taught at business school, that investors back management expertise and their belief in the entrepreneurs ability to execute. In the case of Blueprint Medicines the scientific co-founders are Dr Nicholas Lyndon and Dr Brian Druker, who were instrumental in the development of imatinib (Gleevec/Glivec), a tyrosine kinase inhibitor that revolutionized the treatment of chronic myeloid leukemia (CML).

Blueprint Medicines is a company to watch for the future and Biotech Strategy Blog wishes it well in the quest for personalized medicine and more effective cancer treatments.

The launch of the company in Boston/Cambridge adds to my view that Boston is emerging as the premier biotech region on the East Coast for start-ups interested in oncology and translational medicine.

“Diamonds are Forever” – using nanodiamonds for drug delivery may improve the efficacy of cancer chemotherapy

Nanotechnology is set to have a major impact on drug development and new products for the diagnosis and treatment of cancer. Research from UCSF and Northwestern University published earlier this year in “Science Translational Medicine” shows this potential.

Edward Chow and colleagues describe how binding the cancer chemotherapy doxorubicin (DOX) to carbon nanoparticles 2-8nm in diameter in the form of a diamond, “nanodiamond” (ND), improved drug efficacy and overcame drug resistance. Although this pre-clinical animal research has not yet been confirmed in humans, it raises the possibility of more efficient chemotherapies and the hope of increased survival rates as a result.

The conclusion from this research is that nanodiamonds may be a viable drug delivery platform for small molecules, proteins and nucleic acids. This technology could have an application in wide range of diseases.

Why is nanoparticle-mediated drug delivery more effective? The paper suggests one reason is that the nanodiamond-doxorubicin complex (NDX) allows for a more gradual release of DOX, allowing for increased tumor retention and increased circulation time.

It’s important to note that the NDX complex does not specifically target the drug efflux pumps, such as MDR1 and ABCG2 transporter proteins, responsible for chemoresistance. Instead the NDX complex appears to overcome drug resistance passively by the way DOX is released from the nanodiamond.

This research shows that taking old drugs and combining them with new drug delivery technology may offer therapeutic benefits. The authors conclude that this research, “serves as a promising foundation for continued NDX development and potential clinical application.”

If successful in humans, it will translate into new product development and market opportunities for emerging biotechnology and biopharmaceutical companies.

Chow, E., Zhang, X., Chen, M., Lam, R., Robinson, E., Huang, H., Schaffer, D., Osawa, E., Goga, A., & Ho, D. (2011). Nanodiamond Therapeutic Delivery Agents Mediate Enhanced Chemoresistant Tumor Treatment Science Translational Medicine, 3 (73), 73-73 DOI: 10.1126/scitranslmed.3001713

Letter from San Francisco

I was recently in San Francisco so thought I would continue my theme of writing about biotechnology regions that I visit around the United States.

Growing up in England, I remember listening to the radio broadcasts of the late Alistair Cooke, who from 1946 to 2004 shared his “Letter from America“; the longest running radio programme ever produced. In the pre-internet era his mixture of anecdotes, insights and reflections reminds me of modern day blogs.

San Francisco remains a favorite city of mine. Fueled by access to venture capital and proximity to major research universities such as Stanford, University of California at Davis, Berkelely & San Francisco, start-up companies continue to thrive in the Bay area. BayBio, Northern California’s Life Science Association runs many excellent events. Their annual conference in April is focused on “Powering Global Innovation.”

The anchor tenant in the San Francisco biotech mall remains Genentech, and no other company in the area has had the same growth trajectory. What catapults a company forward is a combination of a breakthrough product and ability to capture its value. The licensing deals and acquisitions we see today in the biotechnology industry, to some degree limit the ability of emerging biotech companies to repeat Genentech’s model. Risk sharing, partnering and the desire of venture capitalists for an early return on investment, all limit the ability of a biotech company to make it to the major leagues. In the end, even Genentech ended up being acquired by Roche.

What’s the future in San Francisco? It remains a high cost place to live but with a pool of talent in the entrepreneurial culture of the West Coast. There is also the uncertainty about the California economy and the cost of doing business, which is most likely set to increase. In some way, my impression is that San Francisco has not quite taken off as a biotechnology city in the same way that Boston and Cambridge has. Feel free to comment if you disagree or have an opinion otherwise.

AB Science – realizing the potential of masitinib in cancer and inflammation

Following on from yesterday’s news that Gilead had acquired Calistoga and CAL-101, another company that is exploring the interface between cancer and inflammation is Paris based AB Science.

Pharma Strategy Blog has an excellent interview with the CEO, Alain Moussy. AB Science is an emerging French biopharmaceutical company, and I previously wrote about its IPO.

The company has adopted a unique market entry strategy of obtaining approval first in animal health for their tyrosine kinase inhibitor, masitinib. In 2008, AB Science gained European approval for canine mast cell tumors and in December 2010 FDA approval.

The company recently announced that on February 8, 2011 it had its first US sale of masitinib to vets.

Masitinib is in fact a multi-kinase inhibitor that inhibits wild type and mutant forms of stem cell factor receptor (c-KIT, SCFR), platelet-derived growth factor (PDGFR), fibroblast growth factor 3 (FGFR3) and to a lesser degree, focal adhesion kinase (FAK).

Sally Church on the Pharma Strategy Blog has written about how AB Science’s strategy makes sense – if you look at Pfizer, they obtain more revenue from animal health than they do from oncology. AB Sciences’ Masivet® in Europe, Kinavet® in the United States competes against Pfizer animal health’s tyrosine kinase inhibitor, Palladia® (toceranib), which also targets mast cell cancer in dogs.

Not only does this growth strategy generate revenue for an early-stage company like AB Science, it also allows the company to build a sales and marketing infrastructure in the United States and Europe while waiting for the results of pivotal phase 3 studies in humans.

The phase 2 clinical trial data for masitinib in combination with gemcitabine in pancreatic cancer were impressive (28% survival at 18 months). The phase 3 clinical trial results are expected this year. The clintrials.gov listing shows the date for the estimated primary completion date (Overall Survival) as November 2010 with study completion in November 2011. Obviously the exact timing depends on how fast subjects were accrued, but I would be surprised if we didn’t see some data presented at ASCO or ESMO, especially if positive.

In terms of targeting inflammation, masitinib is in phase III development for mastocytosis, rheumatoid arthritis (RA) and asthma. AB Science announced on January 27, 2011 the first patient recruited into their phase 3 study in severe asthma.

The company’s new product development strategy is way ahead of many of its competitors in identifying the links between cancer and inflammation, and choosing to target market opportunities in both areas.

AB Science is an exciting company to watch, and I expect that we will see important new data come out at major scientific meetings this year.

Biotechnology Innovation – is a systems based approach the way forward?

By Pieter Droppert on February 21, 2011

Thanks to Justin Chakma, a student at the University of Toronto, who brought to my attention an interesting article on innovation that he published on Vijay Govindarajan’s Harvard Business Review Blog.

Justin discusses how in emerging markets, venture capitalists (VC) create intentional links between the companies they invest in, compared to the more typical stand-alone investment model we see in Western countries.

By creating an innovation ecosystem, VC’s in emerging markets are able to leverage their investment in multiple companies. I encourage you to read Justin Chakma’s article, in which he discusses the advantages of this approach in emerging markets.

However, he takes the analysis further and argues that a systems based approach to innovation also has relevance in developed markets. As an example he states:

“It’s possible for a drug discovery start-up to identify the most relevant patients, and improve clinical trial success and reimbursement rates, if the VC invests in diagnostics or biomarkers at the same time.”

I certainly think that in emerging markets, where there may be a lack of infrastructure and service providers, taking a portfolio or systems based approach can help bring products to market, and capture value for the VC.

However, are venture capitalists in developed countries really interested in creating an ecosystem around their investments? A VC investing in a biotechnology company has no need to buy a contract research organization for clinical trials, plenty exist nor is there a need to develop the whole system of outsourced service providers necessary to bring a drug to market. I am also not sure that VCs in America are interested in the huge cost of biomarker and diagnostics development for start-ups.

Many VC’s already diversify by investing in a range of companies within a sector. Is there additional value to them in creating formal links and synergies within this portfolio, turning VC’s into mini-conglomerates? I think we need to see more data in support of the idea that a systems based approach does in fact speed-up innovation and time to market.

Austin’s growing and emerging biotechnology cluster

I was in Austin last week for a business meeting (spot the snow around the State Capitol) and was interested to learn that Austin, TX is an emerging and growing biotechnology cluster.

Michael Porter in the Harvard Business Review has written about the importance of clusters of interconnected companies, universities, suppliers and service providers and how these drive increased productivity, innovation and stimulate further new businesses. An important contributor of growth and economic development is the pool of talented workers that develops and is attracted to the local area around the cluster.

Despite being better known for its high tech companies such as Dell, and as the “live music capital of the world”, there is an emerging biotech cluster around Austin. Austin boasts warm winter weather (most of the time), proximity to the flagship University of Texas at Austin, and the incentives of a tax friendly, State of Texas (no personal or corporate taxation).

According to the Austin Chamber of Commerce, there are now more than 100 companies in the areas of research, diagnostics, pharmaceuticals and medical devices. These include Abbott Spine, Arthrocare Corp, Agilent, Alk-Abello, Asuragen, Luminex, Viagen and Zimmer Biologics. Although the University of Texas at Austin lacks a medical school, MD Anderson established a Science Park for basic and translational cancer research in the area. This reminds me of similar facilities in La Jolla.

The University of Texas at Austin also provides a growing pool of educated workers, and I see the convergence of information technology in drug discovery, as where the many IT graduates with an interest in life sciences, can have an important role to play. Bioinformatics and computational biology is becoming increasing important in cancer research, for example.

The University, like many others, provides an incubator for technology start-ups that has raised over $725M in funding. You can read about the important role incubators have to play in the development of biotechnology companies in Christopher Pirie’s interesting article in the MIT Entrepreneurship Review).

However, what cements my view that Austin is an emerging cluster, is the fact that growing start-up companies are now choosing to relocate to Austin, rather than move to more established biotech areas such as Boston or Seattle. Pain Therapeutics Inc. a San Mateo, CA company announced in October last year they would be moving to Austin by the end of 2011 and planned to hire 50-100 employees in Research & Development. As more companies move to the Austin area, this trend is likely to continue.

If you are a growing, biotech start-up company, Austin should be on your radar of potential areas to build your business.

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Can teriparatide be used to treat Osteonecrosis of the Jaw?

This week’s New England Journal of Medicine (NEJM) has an interesting paper (Teriparatide and Osseous Regeneration in the Oral Cavity) that caught my attention on the use of teriparatide (Eli Lilly, Forteo®) in patients with chronic peridontitis, a disease that affects one in five American adults. The total market for periodontitis services and products is estimated to grow at 6.4% to 2016, when it will be worth $1,937 m.

Teriparatide is a recombinant form of parathyroid hormone (PTH) consisting of amino acids 1-34, and is used for the treatment of osteoporosis. In the body, PTH is the hormone that regulates the level of calcium in the blood. Low blood calcium causes increased PTH release. The use of teriparatide has been limited by the FDA due to the risk of osteosarcoma from long-term exposure. However, what makes it an interesting compound is its ability to stimulate osteoblasts to build bone, which is why the results from the NEJM on peridontitis are perhaps not that surprising.

As Andrew Gray in his NEJM editorial comments, because teriparatide activates bone remodelling it may have a role to play in the management of osteonecrosis of the jaw (ONJ). ONJ is a particularly nasty side effect that many breast, multiple myeloma and prostate cancer patients experience following any dental work.

Badros et al, point out in their Journal of Clinical Oncology (JCO) paper, that bone disease effects 70% of multiple myeloma patients, many of whom take a bisphosphonate such as zoledronic acid (Novartis, Zometa®) to reduce the risk of skeletal related events (SRE). Unfortunately, a few patients subsequently end up with ONJ as a serious side effect! Clinical trial results showed that ONJ occurred with a similar frequency in breast cancer patients taking denosumab (Amgen, Prolia®) as compared to zoledronic acid.

One only has to read the patient commentary available on online forums such as breastcancer.org to realize the debilitating effect that ONJ has, not to mention the severe morbidity because of lack of delayed diagnosis and lack of effective treatments.

It is unclear whether the positive results from the NEJM in peridontitis will lead to clinical trials for the treatment of ONJ in cancer patients. Although there is an unmet need, the market is small. In the meantime, I expect that doctors will be using teriparatide off-label to treat severe ONJ, which is less than ideal.

One biotech company banking on continued interest in Forteo® is Zelos Therapeutics, whose CEO, Dr Brian MacDonald is a fellow alumni of the University of Sheffield. Zelos have a nasal spray formulation of teriparatide (ZT-034), which they hope will be equivalent to Ely Lilly’s product (that requires a daily injection).

Source: Zelos Therapeutics. In a press release earlier this year, Dr MacDonald commented:

“We believe that formulation of teriparatide as a nasal spray with comparable efficacy and safety to Forteo represents a simple, convenient approach to dosing that will make PTH therapy a better option for many more patients.”

Zelos’ product is currently in early stage clinical trials, so it will be interesting to see how this develops. The NDA is planned for 2012. It is certainly a valid strategy for emerging biotechnology companies to take an existing marketed product and use a new drug delivery mechanism such as Aegis Therapeutics’ Intravail® drug delivery technology to expand the market.

FDA may seek tighter standards for approval of generics

The news, reported by Bloomberg, last week that generic companies may be subject to stricter FDA standards in order to show therapeutic equivalence is good news for the biotech industry and consumers.

Generic companies have a pretty easy ride in obtaining product approval, and I’ve long been convinced that the formulation of a brand, and what makes it work can include the so called inactive ingredients and how it is put together. I know of many people who have experienced side effects with generics that they don’t have with the branded product.

For this reason, branded generics from the original manufacturer have the ability to retain some market share in the face of generic competition. Sandoz, the generic arm of Novartis uses this strategy to good effect with many mature products. However, if companies instead want to try and maintain a premium priced brand and not adapt to the entry of generics, then they will find their market share erodes extremely fast. Not only is brand market erosion fast with generic drugs, but with biosimilars too.

As reported by Reuters, sales of generic enoxaparin sodium injection, Momenta’s copy of Sanofi’s anti-thrombotic, low molecular weight, heparin sold as “Lovenox” were $292million in the third quarter of 2010. Sandoz markets enoxaparin on behalf of Momenta. They launched the product on July 23, and achieved $292 million of sales in 69 days. With annual sales forecast to be over $1billion, the biosimilar will be a blockbuster and make a significant dent in the $2.9 billion sales of Lovenox in 2009.

The Boston Business Journal reports that Sandoz/Momenta have captured 60% market share already, which is not good news for Sanofi-Aventis and may explain their desire to make acquisitions such as Genzyme to make up for this loss.

Biosimilars that are fully substitutable for the original product, look likely to erode brands extremely fast. Momenta’s success is good for the biotechnology industry and highlights the future market opportunity from development of biosimilars.

Big pharma needs to continue to do its own R&D

By Pieter Droppert on February 24, 2010

Although the market for biotech IPOs is opening, capital constraints remain a key issue for biotech companies. Recent years have proven difficult with limited access to financing, and venture capital in particular has been virtually non-existent. Biotech companies with limited resources have focused on core development activities.

This has resulted in delayed development of pipeline products and is likely to have a future impact on the availability of new drugs for licensing and acquisition by big pharma. One of the consequences is that big pharma cannot rely on biotechnology companies to be the sole source of new products to keep their portfolio's stocked. They will have to continue to invest in their own R&D, however inefficient this may be. However, the trend of big pharma is to outsource and divest R&D as evidenced by the recent layoffs at AstraZeneca and GSK, and the loss of R&D facilities post-merger at Wyeth/Pfizer. The current strategy of big pharma is only likely to exacerbate their pipeline shortages in the face of the generic cliff many companies are facing.

Additionally, as reported earlier this week in the FT, the benefit to pharmaceutical companies of investing in their own R&D is that early stage development is cheap compared to the high cost of buying developed research. Late stage products come at a price premium reflecting their lower risk.

An example of this is the $1.2B licensing and development deal that AstraZeneca did last week with Rigel Pharmaceuticals (Nasdaq: RIGL) for their rheumatoid arthritis drug, fostamatinib disodium (R788). The Pharma Strategy Blog has further insight on this.

Big pharma cannot rely on outsourcing and biotech for all their new drug development and need to invest in their own R&D.

AB Science plans Euronext IPO based on promise of masitinib

Image by Anirudh Koul via Flickr

An emerging French biotech company, AB Science has plans for an IPO on the Paris based Euronext exchange. The company is reported to be seeking €50 million. What makes AB Science interesting is not only that it has a tyrosine kinase inhibitor that has particular promise in pancreatic cancer, but the company has grand designs to follow the growth strategy of biotech companies such as Genentech, Celgene and Biogen Idec.

In the initial company filing with the French Autorité des Marchés Financiers (AMF), the stated corporate strategy is to become a “fully integrated pharmaceutical company (FIPCO)” in order to preserve as much of the potentlal value of the drugs in the pipeline. Very few biotech companies have been able to succeed with this busienss model, so it will be interesting to see if AB Science makes it.

The CEO of AB Science, Alain Moussy provided insight on his plans for the company in the interview he did last year with Sally Church of the Pharma Strategy Blog.

In the interview he states why AB Science has not pursued alliances or partnerships with large pharma companies:

“Biotechs are owned by venture capitalists, who have a 5 to 7 year cycle to make money, but the cycle of drug development is 10-12 years, so in the middle of the cycle they have to sell where the risk is not too high. Typically, venture capitalists do not care whether the product ends up being approved or not. Most biotechs end up following this strategy because they are owned by VC firms. AB Science is owned by entrepreneurs, and we have chosen to dedicate our life to developing products that make a difference. We have to stay independent, because if we try to make money in the middle of the drug development cycle, then we will just select drugs that we can sell to a big pharma, and this is not what we want. What we want is stability for the long-term to have time to take the necessary risks to make the right products.”

AB Science is a company to watch, not only because the CEO has a passion for wanting to make a difference to the lives of patients, but their business model is different from many other biotech companies who instead have adopted a licensing and shared risk approach with major pharma companies.

Ultimately, AB Science’s success will rest on clinical data and in particular the phase 3 clinical trial results for mastinib in pancreatic cancer. Recruitment is set to end in this study in mid-2010 with results in 2011.

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