European venture capitalists celebrate Glaxo’s early vaccines move

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GlaxoSmithKline’s $212m buyout of the Swiss vaccines player GlycoVaxyn will be celebrated in the offices of three European venture capitalists today. Since 2007 the company has raised $32m over two VC-backed rounds, equating to a respectable profit for those involved.

The acquisition also signals the UK pharma giant’s ongoing commitment to the vaccines space, which is being strengthened through the Novartis asset swap. With only two projects having made it into initial clinical testing the GlycoVaxyn technology represents a much earlier-stage bet, albeit one that Glaxo must consider worth cornering.

GlycoVaxyn was set up to develop a novel technique that promises to overcome many of the problems of existing conjugate vaccine technology. Currently these are created via complex and multi-step chemistry-based processes with implications for both the potency and predictability of the final product, as well as the cost and time of manufacturing.

Specifically, conjugated vaccines are made by chemically linking an antigen – typically a sugar from the bacterium – to a protein carrier responsible for promoting a long-lasting immune response. The complexity of the production processes limits the protein carriers that can be used, while the exact site of conjugation and length of the sugar are hard to control.

GlycoVaxyn claims that its recombinant DNA-based technology allows the use of a much broader range of protein carriers, potentially including proteins from the bacterium itself, which can increase the immunogenicity of the final product. And because the place of glycosylation and length of sugar can be controlled, a much more defined product is produced.

On top of these attributes are the obvious benefits of a much simpler manufacturing process, says Gilles Nobécourt of Edmond de Rothschild, the company’s second-biggest investor.

“We believe this has potential to be a game-changing technology for the conjugated vaccine world,” he told EP Vantage today.

Making a mark

Despite the limitations of the technology conjugated vaccines have made quite a mark on the field, accounting for 30% of annual vaccines sales worldwide, GlycoVaxyn says. The global vaccine market was worth $24.2bn last year, according to EvaluatePharma, and the most commercially successful to date, Pfizer’s $4bn pneumococcal shot Prevnar, is a conjugated product.

Whether GlycoVaxyn’s technology is indeed a game changer will take time to tell; only two of its candidates have made it into the clinic.

The most advanced is designed to prevent infection caused by extraintestinal pathogenic Escherichia coli, being developed under a partnership with Johnson & Johnson. It is in a phase I study in 194 women with recurrent urinary tract infections that should yield results later this year. A vaccine against Shigella dysenteriae, which causes severe diarrhoea, was successfully tested in healthy volunteers in 2010, and a follow-on candidate is due to enter the clinic shortly, Mr Nobécourt says.

Glaxo has been working with GlycoVaxyn since December 2012 on a broad collaboration covering a range of pathogen targets, and it has clearly been sufficiently convinced about the potential to want the technology for itself.

It bought a stake in the company as part of that transaction and will pay the three venture backers – Edmond de Rothschild, Index Ventures and Sofinnova Partners – and other shareholders $190m for the remaining shares.

GlycoVaxyn raised approximately $50m in equity financing over its relatively short life. A sale at around four times that amount represents a payday that investors will surely be happy with.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter

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