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Feature Articles : Feb 1, 2009 (Vol. 29, No. 3)

European Bioindustry Upbeat in the Long Term

Pundits Cast Optimistic Predictions about the Future of the Biotechnology Business
  • Susan Aldridge, Ph.D.

A popular feature of “BioPartnering Europe” (BPE), which took place in London late last year, is the  Bioforecaster review, which looks at the life and health sciences sector across Europe and tries to predict what will happen over the next six months. This year in particular, everyone was keen to hear what the experts had to say about the impact of the global financial crisis on biotech and pharma companies.

Stuart Henderson, European head of life sciences and healthcare at Deloitte, had an optimistic outlook. “This industry is not debt dependent. The lack of availability of credit is not a constraint upon its growth,” he reported.

Others had more concerns, specifically about drug availability, an issue the Obama Administration is expected to address later this year. Unfortunately, approval of a new drug is not the final hurdle in the battle to get drugs to the people who need them. Currently there are over 50 million uninsured Americans who do not have access to such drugs.

Patent expiry is another anticipated woe. From 2011–2013, patent expirations will likely cost the industry $113 billion. In addition, there has been a significant increase in the regulatory burden that companies face. But again, Henderson was positive. “The oil tankers are finally turning,” he said, by which he meant that big pharma is finally changing its ways, with a new emphasis on restructuring, speed, and flexibility, which is a good thing for those in the biotech industry. He also pointed out that there is more innovation in partnering, although early-stage inventors still lack confidence. Overall, however, he concluded that the future was bright, despite the current global gloom.

VC Funding on the Wane

John Hodgson, director of Critical I, a business development and intelligence consultancy specializing in the life sciences, reported on his analysis of VC activity in Europe. He found a decrease in early- round finance, but an increase in later- round finance. Looking down the road, however, Antoine Papiernik, managing partner of Sofinnova Partners, said that he believed VCs would make more early-stage investments.

Hodgson also predicted a slight decrease in the size of deals occurring everywhere in Europe except in Switzerland. “In 2007, there was a move away from high-risk investment, and in 2008 that trend continued. Large pharma seems to be picking off the best among the larger biotech,” he said, adding that, strangely, the current global crisis could have the effect of making biotech actually look less risky.

Private investor Andy Richards, Ph.D., shared his belief that there is actually enough cash in the European public biotech system for it to do whatever it wants. However, there is an issue with poor management in biotech, especially in the U.K., although he is not convinced that management in the financial sector is necessarily any better. He also believes there are real signs that pharma is beginning to diversify its business model, and he predicts more pharma spinouts, with R&D-experienced people being recycled. In addition, he feels there could also be a resurgence in companies, without a big cash burn, who provide services, licensing, and deals.

Finally, Sam Fazeli, Ph.D., head of European research at Piper Jaffray, thinks that the bottom of the market is close and that there will be more mergers and acquisitions activity in the future.

Research Moves Forward

Notable among company presentations at “BPE” was Lentigen. The firm is developing a lentiviral vector drug delivery system, permitting the permanent introduction of genes into a wide range of both dividing and nondividing mammalian cells.

A safety switch can be introduced into the Lentigen system in the form of a gene that can be activated to allow the removal of the cells if needed. These features mean that the lentiviral system scores over more traditional vectors like plasmids or adeno-associated viral vectors, said Tim Ravenscroft, CEO.

Lentigen is using the technology in a range of applications involving gene delivery, to produce recombinant proteins, innovative vaccines, and in somatic and stem cell therapy. “Not many platforms can be applied in so many ways,” Ravenscroft added.

The company’s lead product is LG631, which protects stem cells from the toxic effects of temozolomide, the standard treatment for glioblastoma, and will shortly enter Phase I/II trials with Case Western University. Also in the pipeline is LG690 that delivers a safety gene that can switch off the graft-versus-host disease effects of allogeneic bone marrow transplants. Trials are planned with the National Cancer Institute and the Medical College of Wisconsin.

Meanwhile, funding from the Bill & Melinda Gates Foundation to the University of Wisconsin-Madison is allowing Lentigen to progress its plans for developing a new type of flu vaccine based on virus-like particles that could meet the urgent need for a more rapid response to seasonal and emerging viral strains.  

Aquapharm Biodiscovery is a blue-biotech company based at the European Centre for Marine Biotechnology, where research is being conducted on novel chemistries found in the marine environment. The company has a particular interest in anti-infectives as well as antioxidants, biocatalysts, and anti-inflammatory compounds. It is pursuing a mixed business development model with both pharma and nonpharma interests.

Aquapharm is also looking at deep-sea and intertidal zones in areas such as Northern Europe, the Baltic sea, and the Arctic, searching through free-living microbes and symbionts. From a library of over 7,000 microbes, some which are previously uncharacterized and some which are completely new, it is getting a good hit rate, with plenty of compounds that have novel modes of action. Aquapharm has developed a fermentation technology that stresses microbes, encouraging the formation of interesting secondary metabolites. Recently, the company extended an existing R&D licence and signed a new commercial license with Dr. Reddy’s Laboratories. 

Trophos has a cholesterol-oxime chemistry platform that reportedly delivers first-in-class compounds that can modulate dysfunctional mitochondria. The company has developed models involving live motor neurons, which are then physiologically stressed.

“Using this screening platform, we found that our compounds could protect cells from this stress,” explained Damian Marron, Ph.D., CEO. “We understand the structure-activity relationships, and we found that the oxime function and the cholesterol side chain are essential for activity. We believe that these compounds are unique in the way in which they interact with the proteins around the mitochondrial transition pore.” 

TRO19622, the company’s lead product, has been shown to enhance motor neuron survival in preclinical models of motor neuron disease that the company has developed; it also has analgesic effects in peripheral neuropathy. Results of a Phase IIa proof of concept study of TRO19622 in diabetic neuropathy is expected soon, while a similar study in chemotherapy-related neuropathy is planned and another in non-alcoholic steatohepatitis is under way.  

A Phase II/III registration trial of the compound in amyotrophic lateral sclerosis will begin soon and will proceed to Phase II in spinal muscular atrophy. “These are diseases that are hard to crack,” said Dr. Marron. “The focus on the mitochondria is a different approach that we believe can bring new hope.”

Finally, another compound, TRO40303, is in preclinical development for ischemia-reperfusion injury, a condition occurring after a heart attack and revascularization for which there is no approved treatment.