Celgene, the big maker of blood cancer drugs, has gained a reputation for anointing biotech startups before they break out. Now it’s betting on a little Canadian biotech, Zymeworks, with technology for engineering new types of targeted antibody drugs.
Zymeworks is announcing today it has struck a deal with Summit, NJ-based Celgene, in which the biotech giant will get the right to develop and market an undisclosed number of antibody drug candidates that are designed to hit two biological targets instead of just one. Celgene has made a $10 million equity investment to get access to the technology, according to Canadian securities records. The company is also providing an undisclosed upfront R&D payment, and has agreed to pay as much as $164 million in milestone payments for each drug candidate that may emerge from the partnership. If any of the experimental drugs make it all the way to the market, Zymeworks will collect royalties.
The deal represents just another bet by Celgene in the emerging field of “bispecific” antibodies. Scientists have known for years that the first generation of targeted antibodies—like AbbVie’s Humira and Genentech’s Herceptin—could be effective by aiming specifically for a single molecular target of disease. But many antibodies have had limited ability to tamp down more complex diseases with multiple things out of whack at the molecular level, across the spectrum of autoimmunity and cancer. Celgene already has enlisted the help of a few startups, such as Sutro Biopharma, Adimab, and AnaptysBio who claim expertise in bispecific antibody engineering. But Zymeworks, a little-known 50-person company out of Vancouver, BC, apparently wooed Celgene with the same bispecific engineering prowess that previously lured in Merck and Eli Lilly.
Ali Tehrani, the fast-talking CEO of Zymeworks, said he has been up against powerful skepticism the entire decade he has been at the company. He remembers when Zymeworks ran down to its last $300 in the bank in 2009 before getting a modest shot of venture capital. Even after the Merck and Lilly deals, he’s still playing the role of David against established antibody players like Seattle Genetics, Macrogenics, Xencor, and Genmab, on a list of competitors that runs about 40 groups deep. How can a little company in Canada compete for money and talent in such a high-stakes game?
Then, last week at the JP Morgan Healthcare Conference in San Francisco, Tehrani started telling biotech investment bankers about his new Celgene deal. People started paying closer attention.
“We know how much Wall Street cares about Celgene. We thought if we sign a deal with Celgene, it should nip [the skepticism] in the bud,” Tehrani said. “Celgene only picks the best. When you talk to bankers, all you have to say is Celgene, and that’s all they care about. Any other company you do a deal with, they might shrug.”
It’s been a remarkable transformation in perception for Celgene, which for years was known as laggard in innovation, but an ace at marketing a derivative form of thalidomide for cancers of the blood and bone marrow. Under chief dealmaker George Golumbeski and R&D boss Tom Daniel over the past few years, Celgene changed that perception by outflanking Big Pharma companies to build a wide network of small partners with skills in immuno-oncology, gene therapy, antibody engineering, and small-molecule drug discovery.
Celgene’s list of partners has to be considered the envy of the pharmaceutical industry. By betting early, and big, Celgene was able to buy low on companies like Agios Pharmaceuticals, Bluebird Bio, Acceleron Pharma, Epizyme, and Foundation Medicine before they went public. See the full list here.
The Celgene deal is potentially the richest yet for Zymeworks, although Eli Lilly has made a bigger equity investment worth $27 million, according to Canadian securities records.
Zymeworks’ CEO Tehrani isn’t saying what specific molecular targets his 50-company will work on with Celgene. But he has spoken openly about what his technology purports to do, and how Zymeworks is applying it in a novel way against breast cancer.
First, the technology: Zymeworks has devised what it calls a flexible scaffold on which its antibody engineers can work. Many attempts at making bispecific antibodies are hampered by tricky geometry—that is, it’s hard to engineer a single drugs that can bind at the proper angles necessary to hit both molecular Target A and Target B. The Zymeworks technology is also designed to reduce the number of purification steps in manufacturing, and make stable bispecific antibodies that won’t clump together in aggregations. Some bispecifics can split apart during the manufacturing process, defeating the purpose, Tehrani said. Some of the startup bispecific companies are good at one aspect of the engineering, but Zymeworks aims to be a one-stop shop that can solve the geometry of bispecific antibody design, and manufacture them cheaply, quickly, and at commercial scales.
None of Zymeworks’ internally developed drug candidates have made it yet into clinical trials, so it has much to prove. The company’s lead drug candidate is for breast cancer patients with the HER2 genetic abnormality—a market long dominated by Genentech’s Herceptin, and now with newer generation drugs sold as Perjeta and Kadcyla. Instead of designing separate antibodies that are sometimes given in combination to get a more complete blockade against structural variations of HER2, Zymeworks has designed a bispecific that it says can hit the same HER2 variants that Herceptin and Perjeta hit, but with a single bispecific molecule. The company has shown, in head-to-head experiments in mice, that its molecule can improve survival rates when compared to standard Herceptin, Herceptin plus chemotherapy, or Herceptin plus Perjeta. Assuming those results hold up in human trials—always a big if--Zymeworks envisions its drug could be used in newly diagnosed patients, and it could reach a broader population of patients who only have modest amounts of the abnormal HER2 protein on the surface of their cancer cells, and therefore aren’t good candidates for the existing drugs, Tehrani said.
Just behind that lead candidate in development is another anti-HER2 bispecific antibody which is loaded with a toxin to give it extra tumor-killing kick. That would be a more powerful drug reserved for patients with treatment-resistant forms of HER2-positive breast cancer that has spread. Both drug candidates for breast cancer are supposed to enter clinical trials in 2016, Tehrani said.
