August 1, 2017 (Vol. 37, No. 14)

Industry Watch: Buoyed by Megadeals, Biotech VC Poised for One of Its Strongest Years

Biopharma venture capital (VC) activity is poised for one of its strongest years if the dollar volume of deals continues as high as seen in the first half of 2017.

Investors raised $1.876 billion in 93 biotech VC deals during the second quarter, according to the most recent quarterly MoneyTree™ Report from Pricewaterhouse-Coopers (PwC) and CB Insights, released July 12, 2017.

That’s 5.6% in dollars, and about 21% in number of deals, above the $1.776 billion in 77 biotech VC transactions recorded in Q2 2016. However, the second three months of 2017 lagged behind the first quarter, in which $2.821 billion in VC was raised in 112 deals.

Q1 numbers were skewed by a pair of megadeals totaling $1.1 billion—nearly all of which consisted of the $900 million raised by cancer diagnostics firm Grail.

“If we continue to see one or two large deals like we have over the first two quarters, we could be looking at one of our strongest life science years in history,” Greg Vlahos, PwC’s US life-sciences venture capital leader, told GEN. “If you look at the total dollars for just the first two quarters, we’re on pace for an extremely strong 2017 that has been buoyed by some of these megadeals we saw in Q1 and Q2.”

During the second quarter, a pair of additional nine-figure deals were completed, accounting for about 26% of the quarter’s biotech VC financing. Guardant Health said May 11, 2017 that it racked up $360 million in new funding, while Rubius Therapeutics said June 21, 2017 that it raised $120 million in a “highly” oversubscribed private financing.

Seven additional companies raised $45 million or more, accounting for $372.18 million or nearly 20% of the VC funding raised during Q2. WuXi NextCode raised $75 million, the most of the seven, followed by Intarcia Therapeutics ($54.68 million), Deciphera Pharmaceuticals ($52 million), Magenta Therapeutics and Syntimmune ($50 million each), Arsanis ($45.5 million), and TP Therapeutics ($45 million).

“We’re seeing dollars go to companies who normally are at a later stage deal getting close to a liquidity event. As it takes a little longer for liquidity for some companies, we’re seeing larger rounds go to these companies,” Vlahos said.

Discovery & Development: No Small Thing: The Combination of Mass Spec and Informatics

Mass spectrometry, a mainstay of drug development, is broadening its purview. Besides confirming drug structures, identifying ancillary or extraneous molecules in formulations, and gathering pharmacokinetic information, mass spectrometry is venturing into metabolomics. Mass spec, with its unique detection capabilities, can identify and quantify all the metabolites in a biological system.

Mass spec is especially useful in metabolomically inspired small-molecule analysis when it characterizes shifts between experimental and control groups. The problem, however, is that processing all the data that are involved is generally beyond human ken, to say nothing of the interpretive challenges. Consequently, mass spec instrumentation providers are improving their discovery software. For example, they are incorporating sophisticated informatics, through partnerships and acquisitions.

Thermo Fisher Scientific, notable for its mass-spec development, is teaming with SRI International. The companies have announced that they are working together to enable quick and effective mass spec-based small-molecule research and analysis. As a result of this collaboration, results obtained via Thermo Fisher Scientific’s high-resolution Orbitrap LC/MS experiments may be combined with highly curated and organism-specific metabolic pathway and genome data.

According to the companies, researchers may now benefit from a direct link between the Thermo Scientific Compound Discoverer 2.1 software platform for small-molecule research and SRI International’s BioCyc, a collection of 9,300 databases that provide electronic reference sources on the metabolic pathways and genomes of many organisms.

The ability to automatically and interactively overlay statistical data onto these pathways can facilitate the biological interpretation of results obtained from a metabolomics experiment. Ultimately, this new link is expected to speed data analysis for Compound Discoverer users and enable them to visualize many individual compound measurements to gain a comprehensive understanding of biological processes in an experiment.

Such capabilities may contribute to growth in the metabolomics segment. According to Markets and Markets, the global metabolomics market is estimated to grow at a CAGR of 14.6% from 2016 to 2021 to reach $2.39 billion by 2021. Markets and Markets cites favorable factors such as the increasing need for accurate diagnosis of diseases, rising demand for personalized medicine, emergence of advanced technologies, increasing pharmaceutical and biotech R&D expenditure, and the availability of government and private funding.

Genomics & Proteomics: Sequencing Lab Receives Coveted CAP Accreditation

Next-generation sequencing (NGS) technology has been a boon for both researchers and technology development companies alike. In a small number of years, NGS has begun to efficiently transition from being purely a research tool to a tool that is used in the clinical arena. While it is still many steps away from replacing traditional gold-standard diagnostics, NGS technology has a promising future.

One recent example lies with Helix, a personal genomics company, which operates one of the world’s largest NGS laboratories in San Diego. The company recently announced that its laboratory was accredited by the College of American Pathologists (CAP) for meeting the highest standards in quality, operations, and patient safety. The CAP Accreditation, and the Clinical Laboratory Improvement Amendment (CLIA) certification, which Helix earned in 2015, are internationally recognized credentials awarded to laboratories complying with the most comprehensive, rigorous, and scientifically endorsed standards of laboratory practice.

“Our state-of-the-art, high-throughput DNA sequencing laboratory is the foundation of our business and critical to the success of our soon-to-launch and first-of-its-kind online marketplace for DNA-powered insights,” explained Robin Thurston, CEO at Helix. “We’re proud to earn the dual distinction of being CLIA-certified and CAP-accredited and commend our scientific and clinical teams for their diligence and commitment to uphold the industry’s most stringent requirements for laboratory testing, record-keeping, reporting, safety, and quality.”

Helix utilizes a proprietary sequencing assay known as Exome+. The assay sequences more than 22,000 protein-coding genes—known as the exome—plus hundreds of thousands of additional information-rich regions. Additionally, the company is planning to launch the first online marketplace for DNA-powered products, enabling consumers to sequence their DNA to access personalized insights on health, fitness, nutrition, ancestry, family, and entertainment from its network of partners.

Bioprocessing: Tackling Downstream Bottlenecks

Although downstream processing moves much faster than in the past, obstacles remain as companies pursue their individual biomanufacturing strategies. GEN spoke to Günter Jagschies, Ph.D., strategic customer relations leader, GE Healthcare Life Sciences, for his view of the downstream processing issue.

GEN: How significant a problem do downstream bottlenecks still pose to biomanufacturers?

Dr. Jagschies: These problems have typically been ‘homemade’ via a mismatch in dimensioning of tanks and sometimes chromatography columns with upstream productivity increases. The more new facilities are inaugurated, or legacy ones get upgrades, the less of a problem [bottlenecks are]. Many companies are taking a scale-down decision to 1,000–2,000L reactor size and this removes the issue entirely. Use of recent-generation downstream processing (DSP) tools is important in all these scenarios.

GEN: What are the main downstream challenges?

Dr. Jagschies: Next-generation designed biotech medicines such as antibody derivatives, conjugates, or oligonucleotides pose different challenges, both for the capture step (affinity concept may not be available), and for the polishing phase, where unusual impurity profiles may challenge established process designs and classic chromatography resins. Permanent adaptation of the selectivity and features portfolio is required.

GEN: What can be done to address downstream challenges and improve efficiency?

Dr. Jagschies: One key element in new developments is access to the problem for those who shall address the challenge, e.g., DSP technology suppliers. This requires close collaboration between R&D teams. Fast processing or continuous operation will not address these selectivity challenges. We will need to find new selectivities and will have to use a systematic approach to orthogonal combination of purification mechanisms.

Günter Jagschies, Ph.D.

Molecular Diagnostics: FDA Clears Thermo Fisher NGS CDx for Three NSCLC Treatments

The FDA approved Thermo Fisher Scientific’s Oncomine™ Dx Target Test as the first next-generation sequencing (NGS)-based companion diagnostic that screens tumor samples against panels of biomarkers to identify patients who may respond to one of three different treatments for non-small cell lung cancer (NSCLC).

The Oncomine Dx Target Test exploits high-throughput, parallel-sequencing technology to screen tumor samples for 23 NSCLC genes, to identify patients who may be eligible for therapy using the Novartis drug combination Tafinlar® (dabrafenib) plus Mekinist® (trametinib) for tumors with BRAF V600E mutations, or treatment with Pfizer’s Xalkori® (crizotinib) for ROS1 fusions, or therapy using AstraZeneca’s Iressa® (gefitinib) for EGFR L858R mutation and Exon 19 deletions.

“For people battling NSCLC, time is critical and days matter,” said Joydeep Goswami, Ph.D., president of clinical NGS and oncology at Thermo Fisher, in the press release. “The Oncomine Dx Target Test rapidly guides oncologists toward the right-targeted therapy, with the goal of improving patient outcomes and the cost-efficiency of treatments.”

The FDA separately approved the Tafinlar plus Mekinist combination for treating patients with BRAF V600E mutated NSCLC tumors screened using the Oncomine Dx Target Test.

Thermo Fisher developed the Oncomine Dx Target Test in collaboration with Novartis and Pfizer. The assay is based on Thermo Fisher’s Ion AmpliSeq technology, which can screen tumor samples for multiple genetic markers using 10 nanograms of nucleic acid. FDA has in parallel granted 510(k) clearance to Thermo Fisher’s Ion PGM Dx System to run the Oncomine Dx tests on formalin-fixed paraffin-embedded (FFPE) tissue samples.

Thermo Fisher is looking to expand utility of the test, which also targets 20 NSCLC-associated gene variants that are currently being evaluated in clinical trials. “This first iteration of the test is just the beginning since the diagnostic claims of the Oncomine Dx Target Test may be expanded in the future based on the existing panel,” Dr. Goswami added. “Thermo Fisher has entered into discussions with several pharmaceutical companies looking to use the panel for FDA-approved targeted therapy applications beyond lung cancer.”

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