Having finally got out of the starting blocks with their first licensing deal to secure a phase II pancreatic cancer compound from Clavis Pharma, the management team at Clovis Oncology are not about to start resting on their laurels any time soon.
Speaking to EP Vantage, Patrick Mahaffy, chief executive of the private group, explains that while the immediate focus is on managing a smooth and quick transition of the compound from Clavis and starting the 250 patient trial they committed to at the time of the agreement by February or March, further deal making is still very much on the agenda.
“The theme has always been to build a portfolio and I would hope that next year we can license two additional compounds,” he says
Given the background of the Clovis team, they formed the backbone of the ultra successful Pharmion management who successfully sold the business to Celgene for $2.9bn in 2008, it is not surprising that the focus of Clovis, which was set up in May with a generous first funding round of $145m, is strictly oncology.
Speculate to accumulate
The business model also mirrors that of Pharmion, whereby cancer compounds are in-licensed and developed by the group to create a company with both scale and profits.
Having set out his stall to quickly ramp up Clovis’s portfolio over the next 12 months or so, Mr Mahaffy envisions once this is done the pace of licensing will slow to a more leisurely one compound a year.
The final number of compounds will ultimately depend on what stage the group decides to license them in at, with Mr Mahaffy believing the most likely scenario will be a phase I/ll product and potentially a phase I ready product for next year.
If Clovis’s focus remains on development stage products then five compounds in the pipeline four or five years from now would just about see the group reach the limit of its financial and operational capacity.
At the moment money is certainly not an issue. The fact that the group managed to raise $145m in the current climate is a testament to the strength and highly regarded management team. The money was also contributed by the same group of investors who saw their bet on Pharmion rewarded with the Celgene deal, they are almost certainly going to be hoping for a repeat performance this time round.
However, in terms of medium term funding, Mr Mahaffy concedes that if he does strike his five deals then more money will be needed potentially within two to three years, something he seems very comfortable with. “I’m not worried about our ability to do a subsequent financing if we do a good job in the initial spending of the $145m we have,” he says.
What might be inflating this cushion of confidence is the fact that current investors, who include Domain Associates and Abingworth, have left some gas in the tank, and have obviously stated their willingness to be part of another funding round.
But rather than another private round they might have the choice of investing through an IPO, something that Mr Mahaffy says could very much be on the cards. “It’s possible that if we did a good job and start generating some data we would be an attractive IPO candidate in the next couple of years.”
Generating that data will, however, involve getting more products.
In terms of what is being sought to bulk out the pipeline the group is very clear; products that have both a straightforward developmental and regulatory pathway. But the group has added an interesting caveat to in-licensing that could see it succeed in getting the majority of its products used as front line treatments, a feat that is becoming increasingly difficult given the growing number of cancer products on the market.
What Clovis will focus on is products that target subsets of cancer patients, which have an obvious biomarker attached to help them in this task. This strategy explains why Clavis’s CP-4126 was chosen as their first compound, with its potential biomarker for hENT1 a transporter protein.
If the drug is successful it could target the 50-60% of pancreatic patients who do not currently respond to existing treatments, creating a lucrative and sizable market.
This very specific strategy should also play well with the commercialisation of any drug produced.
Competition for assets
But while Clovis may have cash in a time when many smaller biotechs are struggling and potentially more open to deals, the companies that do have good compounds will not give them away just because they are feeling the pinch. So finding assets may not be quite the walkover that some have assumed.
The group is also obviously competing with larger pharma groups who themselves are keen to move into the fastest growing therapy area in the space and have much deeper pockets than Clovis.
But when it comes to getting companies to sign on the dotted line Mr Mahaffy believes this David and Goliath scenario is counter balanced by not only Clovis’s team with its vast oncology experience, but the fact that they will be totally focused on any in-licensed products because their fates are intertwined. “We have to make compounds succeed because they relate to our success as an organization,” he says.
The personal touch
He also believes that some smaller companies appreciate what is certainly more a personal touch than they would expect within larger organisations. “Compounds can get lost in prioritization reviews within big pharma. You get focus, you get no bureaucracy and you get very clear and quick decision making with a company like ours and that does not always happen in big pharma,” he adds.
This thought process obviously struck a chime with Clavis investors, as shares in the company rose by 60% after the deal was announced.
As for the future and whether the group will echo Pharmion’s progress completely and be sold in nine year’s time Mr Mahaffy is very much focused on building a sustainable enterprise. “I only want to create a business that matters. If that matters more to someone else then that is beyond my control.”