NovImmune demonstrated this week that if you have got the products, the cash is out there for the raising. The private Swiss biotech has managed to secure Sfr62.5 ($55m), mostly from existing investors, to fund the development of its pipeline of seven antibodies.
A small slice of the funds will be used to execute a strategy which could be the making of the company; buying back two antibodies previously licensed to Merck KGaA, one of which is ready to start a large phase II trial in type I diabetes and will be out-licensed as soon as possible. As one of the few antibodies of its type not in the hands of big pharma, and one of only four in clinical stage trials, this means another source of potentially significant funds is on the horizon. Jack Barbut, chief executive, told EP Vantage today that the search for a partner will begin as soon as possible.
The antibody in question is NI-0401, a fully human anti-CD3 mAb, which binds and modulates the CD3 epsilon chain expressed on all T cells. Its immunomodulatory effect means phase I/II trials in type I diabetes, Crohn’s disease and transplantation have been conducted, as well as earlier stage research in indications such as multiple sclerosis, psoriasis and ulcerative colitis.
“The data so far is very interesting, so we are moving forward with a phase II/III trial in type I diabetes. We expect data in the first half of 2011, and if it is positive we can go straight into phase III,” Mr Barbut said.
With potential in the much larger markets of Crohn’s disease, rheumatoid arthritis and multiple sclerosis a partner will clearly be needed, and hopefully signed up between now and the start of phase III trials.
“We have got enough data to talk to people between now and then, we have data in Crohn’s disease that confirms the mode of action,” he said.
With the cash raised, NoImmune has sufficient funds to complete the large multi-centre, multi-country phase II/III trial, if necessary.
The only other anti-CD3 mAbs disclosed in clinical development are in the hands of GlaxoSmithKline, with TRX4, and Eli Lilly, with teplizumab, both currently in phase III trials for type I diabetes. Additionally, Tolera has an earlier, phase II candidate in organ transplantation trials.
Glaxo licensed TRX4 from Tolerx in October 2007 for $70m upfront and up to $680m in development costs and milestone payments. However, at the time the drug was more advanced than NI-0401, having completed two phase II trials in type I diabetes. Tolerx is running the phase III programme, which started in August last year.
Coincidently, Lilly struck a deal over teplizumab with private biotech MacroGenics the same month as Glaxo moved on TRX4. It bought the exclusive rights to compound, which was already in phase III, and struck a deal over potential next generation anti-CD3 molecules for an initial $41m and $550m in milestones. A further $600m in milestones are possible if further antibodies and/or indications are successful.
Mr Barbut is not fazed by competition that is a couple of years ahead. He is confident that NI-0401 is a better molecule, mainly because it is the only one to be fully humanised. This means it generates a much bigger antibody response; low aggregates and a shorting dosing schedule are other advantages. This will give NI-0401 key differentiation, and a better risk benefit profile, should all reach the market, he says.
The terms achieved for TRX4 and teplizumab suggest that NovImmune should also be able to strike a lucrative deal. As well as NI-0401, a number of other projects could be out-licensed, generating further cash. Even before any deals, the group has enough cash to last 18 to 24 months.
All of which means Mr Barbut does not envision needing to raise more money for some time.
“Our long term goal is to generate sufficient revenues to sustain our research activities, and eventually become a fully integrated biotech. We have now got a sufficiently strong pipeline to generate money from partners, which should be able to sustain our growth. Which is why our investors have given us the money they have,” he said.
Being focused on immunology, one of the most valuable, fastest growing and therefore attractive areas of drug research at the moment, will certainly have helped the group with its latest cash call. If NI-0401 moves into phase III successfully, the rest of the pipeline progresses and the group has few deals under its belt, NovImmune looks like a prime IPO candidate for a few years down the road, when the equity markets become more receptive. Assuming of course the group has not become prey for big pharma, another highly possible outcome.