4-Antibody: reshaping an antibody platform company and adding pipeline for a successful exit




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Video title: 4-Antibody: reshaping an antibody platform company and adding pipeline for a successful exit
Released on: May 31, 2012. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Robert Burns, CEO of 4-Antibody AG
Origins and technology of 4-Antibody
Fintan Walton:
Hello and welcome to PharmaTelevision News Review. On this show I have Robert Burns, who is CEO of a company called 4-Antibody AG based in Basel, in Switzerland, welcome to the show.
Robert Burns:
Hi.
Fintan Walton:
Robert you're if I can say a veteran for the industry being in biotech?
Robert Burns:
How diplomatic.
Fintan Walton:
Always try to be and that history and that journey for you has brought you through very many different aspects of the pharmaceutical and biotech industry and you've been involved in all sorts of things including restructuring and refinancing companies, repositioning companies working with a very basic science and today now you're a CEO of a company called 4-Antibody AG, so when you joined 4-Antibody AG that history, that knowledge what incentivizes you to join a company that is still into very early stage and why do you want to spend your time try to turn this company into something as gonna be a success story?
Robert Burns:
Well it like most people I think it probably takes you a long time to work out what you're good at and it certainly took me a long time to do that and belatedly it became clear to me that actually I am very good at seeing an opportunity and anticipating where for example a technology or a company could be moved to and that has ended up in strategic repositioning of companies and I don't think if you'd asked me 20-years ago, I mean when we first met in fact I mean if you'd asked me then what I was good at I probably wouldn't have thought of this. The other thing that I think I've belated realized is that I was very, very fortunate in the early stage of my career to be working in as it happened in American company Corning Glass Works but at a time when that company was going through profound change and it was change that was led from the top and it helped me understand what leadership can do in terms of redirecting, reshaping and motivating an organization to move in a new direction, now at the time I don't think I really value that and really understood it, it was only when I got into biotech that I realized how inadequate the biotech model is, because you've got on the one hand the key asset which is scientists who are very smart, compellingly smart which is why they've risen to the positions that they've risen to but they've came from an academic model which is not usually about team work or cooperative working relationships, so they've unless they've been terribly lucky they probably had a floored map of leadership and motivation imbued in their background and then you've got a group of investors mostly who don't come from an operational background themselves either, so you've got a disastrous sandwich waiting to happen, so you've got a group of people who think they all together be able to lead an organization but there is no reason to suppose that they have the leaderships skills yet to be able to do that because no one has invested in that and a group of people who think they know how to run a company but actually don't have experience of doing that, as not to say not smart but that's the dilemma one of the core dilemma's that I've think biotech really has this.
Fintan Walton:
But we've changed a little there we call it each of us all got little bit better of doing that?
Robert Burns:
And someways I lost a lot of my hair, no but I think I do, I do.
Fintan Walton:
As an industry because I think the VC's of the past were incredibly naive and they are a little bit more experienced and I think that the people who run biotech's got better at doing it?
Robert Burns:
But if you want to turn a company around you can only do it through an acute sense of what you are trying to achieve, an ability to clearly articulate that, define the directional statement.
Fintan Walton:
Which is your point.
Robert Burns:
The boundary statements and then provide the organization with a lot of support to get.
Fintan Walton:
It's a leadership issue, which is a problem?
Robert Burns:
It's a leadership issue.
Fintan Walton:
Right, you are now in a leadership position at 4-Antibody AG and how you gonna lead this company, tell us a bit about the company, tell us about the challenges that you have for that company?
Robert Burns:
Well what appealed to me about the company is it has a wonderful technology now it's taken a long time for the company to develop that technology to the robust state that it's currently in, but it's finally got to that point and now it's all about well where do you want that technology to take the company and how can you construct a plan for actually exiting this company, I mean it's a remarkable truth in our industry that although people actually say it's all about the exit when you actually sit down talk to most people about the process that they've put in place to get from A to B and actually have a plan to exit the company and make a return for their investors sometimes there is a bit of a gap and so that's really I think a key part of this process, you've got a technology that's already in a wonderful position it's probably got a relatively limited life time in the sense that in biotech there are always resilient sharks swimming after you who've got sharper teeth than you have and trying to manage that process of delivery of expectations and make that all in a tangible times go where you can exit the company and provide a return.
4-Antibody AG's Retrocyte Display technology platform
Fintan Walton:
Right, well the first thing lets look at the company because you've got a platform, platform companies do get acquired so you have a potential to be acquired or to have an exit and by a very large company who wants to grab your wonderful technology, so let's look at that technology. What are you doing Robert at 4-antibody that's different to everybody else and what advantage did you have?
Robert Burns:
So one of the big issues in pharma as you are very well aware, I mean you've studied this transfer a long time is there are lots of companies in the biological space, lots of companies in the antibody space here is a platter of technologies it's very, very easy these days to get initial antibody hits to a particular target, it's much more difficult to turn those hits into what I would think all those molecules that look and smell and feel like a candidate drug and that's the gap that we're trying to bridge and that's a really key need in the pharma industry right now, now there are all sorts of other technologies that trying to position themselves in that space as well, so it's a highly competitive space and part of what I think you have to do in a company and certainly what we're doing at 4-antibody is not just to have one exit plan which is sugar daddy comes along and buys your whole company for the technology in which we are brilliant and might have been an even more compelling proposition 10-years ago when a lot of companies where you know in a much more aggressive phase in terms of technology acquisition. I think you have to plan for the scenario that might not happen in that way and so you have to think about how could you leverage the technology to began to create potential product value as well and that's very challenging in our funding environment at the moment, because most investors are terrified of investing in product discovery and product development for good reason because most of their prior investments have failed, so that's a big challenge, but I think to have one exit scenario is just not credible and so if you like a third fall back is can you actually create a model where the company is self"sustaining and could potentially run an provide a service revenue for you know 5 to 10-years which might be an alternate exit it's not as attractive, but it's ultimately.
Fintan Walton:
A traditional return to investors for dividends?
Robert Burns:
It's a plan C.
Fintan Walton:
Yes. Okay so in that environment taking that into account let's looking at the science, because this Retrocyte-Display technology is the fundamental platform we are talking about, could you explain that to me and the audience?
Robert Burns:
Okay, so when you immunize a mouse basically what you are doing is you are putting your molecule in contact with the primary cellular machinery of the mouse that recognizes it is foreign and raises it's antibodies to it and that's the B cells, so the B cells sits in the mouse resilience over them and they have their receptors on the cell surface and when the antigen finds itself in contact with one particular B cell which has its unique receptor it binds that sends a signal into the B cell that tells that B cell to replicate and reproduce itself and produce a clonal population of similar molecules that all bind to the target and the other B cells die away, I mean that's just the process that's used now that's a very effective way of raising antibodies, from a drug discovery perspective it has some limitations it's a bit of a black box you can make that system work very well but you don't really know the quality you're going to get out of that until you've got the reagent or the molecule and you are valuating it, so you can't for example direct that approach to a particular epitope, if you came to me as a researcher and said look I got this wonderful molecule and here is the bit of the molecule if I need to raise an antibody too, if I injected a mouse with that even a transgenic mouse for example I have no way of controlling where that antibody binds the target. Now if I flip to the other side of the equation and we look at the in vitro platforms like phage display for example or yeast display they are extraordinarily good generating binders very rapidly, so very diverse libraries give you may be 100 may be 500 molecules that would allow you to very rapidly test the hypothesis is this target attractable to an antibody intervention for example. But in terms of telling you which of those won 1 of the 100, 1 or 200 is your development lead there is a big gap. So on the one hand you've got a high fidelity system which is sort of a black box there are something's it can't deal with like toxic antigens, it can't deal with for example of self-antigens that would be recognized by self as the mouse can't be dealt with. We've got another system which is fantastically high throughout but doesn't quite have the fight fidelity of the in vivo system to give you a good quality antibody product looks like a drug. So what we've done is we've said well why don't we just work with B cells because that's what nature intended them to do and they spend gazillions of dollars in millennia to optimize and simply work out away of putting it into in vitro setting you get all of a high throughput efficiency going into in vitro, in vitro industrialization if you like but using the fidelity of the B cells so that in an nut shell is what we are doing.
Colloboration with Ludwig Institute of cancer research
Fintan Walton:
So that provides you with the means to discover these new entities and so what's the next stage you know, you now have a platform, that's a proven platform you've now got to do the next thing which is what antibody you gonna generate? Are you back to the same issue?
Robert Burns:
So a conventional model would be to do two or three partnership deals for example with pharma that in a sense validates your technology, now of course any one of those pharmaceutical partners if with the right sense of competitive tension and the right desire and interest could easily consume even by you, so that's one scenario taking care of, you know in my sort of idealized model how many of those can you manage, manage effectively my sense is may be two or three but not more and is that enough for you to have the competitive tension that you required for a potential exit probably. So what's the alternate opportunity now if you've got a powerful platform technology that actually is not capacity limited and I think that's one of the other powerful attributes of our technology then you can say okay I've got spare capacity in this discovery engine how can I now start to use that to develop potential drugs for myself, okay. Second challenge is how can I finance that without terrifying my investors that I am going to distract them down a very expensive route which is strewn with lots and lots of companies that have tried this before and failed. So the way we are attempting to do that at the moment is way back I worked for a while in New York with the Ludwig Institute for Cancer Research which is a fascinating organization that has had it has the benefit on an independent endowment was set up using the wealth of the man who was the Bill Gates of his day in the 50's and 60's made his money in shipping, Daniel Ludwig set this organization up just to do cancer research and what the organization has done is focused exclusively on cancer immunology trying to use the immune system to actually deal with cancers, now of course that's an appealing concept it's been around a long time, they have focused on this for about 25-years so there is fantastic expertise about doing very, very precise immunological monitoring of responses in a clinical setting, now that's an expertise that I couldn't possibly invest to create even if I had the resources, but if I can take access to that or get access to that through a collaborative relationship then it's highly appealing to me because I am not using my investors money to invest in that, so what I've done this is being announced is put together a collaboration with the Ludwig [PharmaDeals ID = 40923] where we focused in on a panel of targets which are very hot and sexy now in the cancer immunology space they all about immunomodulation my CTLA4 for example would be an example that's been approved but there are many, many other molecules in those types of checkpoint pathways which is all about activating T-cells and deactivating regulatory T-cells for example, in other words to maintain an appropriate immune response in the presence of cancer, but it's one of the strategies that cancer uses is to suppress the patients immune response so that the cancer is not recognized and it's always occurred to me quite bizarre that there have been companies those have been attempting to invest for example at cancer vaccine strategies over the years, therapeutic vaccines without asking the fundamental question if I can't deal with the immuno suppression which is there as a consequence of the tumor in the first place what's the point then we trying to immunize this patient we finally the consensus is moving around to the view you have to deal with immuno suppression first and that's the importance of this class of molecule, so we've set up effectively a risk sharing model with the Ludwig that says here is the panel we will go after them, we will go after them all because the power of our technology analysis to do that and they've got the clinical infrastructure to be able to take these things through to a value point in the clinic where you can actually sit down with the pharmaceutical partner you can say look this, this is really interesting, it's tolerable, it's safe and it's got activity.
Fintan Walton:
I think it's interesting that you've taken it and gone back to you know not to a pharma company which some people would have done, but to use an institute like the Ludwig?
Robert Burns:
Just because it too early.
Fintan Walton:
Well and also they've got they are so enriched with that experience.
Robert Burns:
Yes.
Fintan Walton:
Probably even more so than may be some pharmaceutical companies who have transient entry search activities?
Robert Burns:
Yes, yes and that's just fortunate because I have worked there and know that.
Business model, Deal with Boehringer and future plans
Fintan Walton:
Yes, of course life need in the end we need fortunate and so that's the next stage that's the current ongoing activity and beyond that then in terms of how do you take this business forward in terms of the business model presumably you gonna get leads coming out of this program which you're going to take forward, what's the plan after that?
Robert Burns:
So if I go back to the antibody discovery platform, so a model that you'll remember from years back with Cambridge Antibody Technology and MorphoSys was the concept of supplying a recombinant antibody library to pharma companies that wanted to do that work themselves internally, so if you think of the spectrum of market opportunities as pharma companies that want to integrate the technology platform might be at one end of the spectrum and then pharma companies who actually are more aligned for whatever reasons with complete outsourcing. Then what we're thinking through at the moment is okay how do we manage to our end exit objective, but make sure that we are not losing an opportunity in this whole spectrum of the marketplace. So what we are doing at the moment is trying to evolve from a situation where say Boehringer Ingelheim will come to us with targets and say please deliver a panel of antibodies with this specification, that's what we do.
Fintan Walton:
And that's the collaboration you've got just that?
Robert Burns:
That's the initial collaboration we have with Boehringer [PharmaDeals ID = 35152] and is still in place. Now that's to me that's a validating position there is no doubt about that, but I don't think it moves as far enough of the value chain, it's fine if Boehringer wants to buy us at the end of the day that's great, but you know how do I get them to that recognition rather than just delivering them panel of antibodies. So the question we've ask is can we take a technology that we are using internally now and turn it into a products that we can offer as part of an initial technology transfers a bit of a tease you know play with the technology in your own laboratory and the way we are doing that is with cellular libraries, because of course our B cells are cellular so we've got a 10 to the 9 diversity mammalian full-length immunoglobulin library in heavy and light chain form in a population of B cells, these B cells are so robust they can be frozen down, they can be shipped, they can be (indiscernable), they can be used. So now we have a really interesting model which is to a partner who wants to begin to use the technology in their own operating environment, but now we have another challenge from a divestment perspective because what you want to do is to make sure you haven't sold the company in that deal, so now the issue is okay what is it you don't want to give them or what we are doing at the moment is we are taking the technology to the next stage which is to say what is it that antibodies have entirely missed thus far and broadly it's challenging targets like GPCRs, like Ion channels. These are all cell membrane associated molecules there is no conceptual reason why antibody shouldn't be amenable modalities there are some practical limitations and challenges to some respects looking for GPCR with an antibody is like looking for a bush in the middle of the Amazon rain forest, I mean there is a lot of noise floating around on the cell surface that you have to you know weave your way through to get to your target. So we are working on pushing the technology to that extent were we can say okay now we can demonstrate robustly that this can do GPCRs and it can do Ion channels now you've got something which I think corporate pharma would look at and say we're familiar with the technology and this is whole target space out there that we could potentially use this technology for think we need the whole of that in-house. So that's another way of you know moving, moving the position in terms of thinking about an exit strategy, now in other exit scenario is you have to think will someone buy you for a technology platform alone are they buy you for a combination of a technology platform a fledgling pipeline or is it the case that they would offer you something for your pipeline which doesn't in your view equate to the true value of that in which case you'd want to keep that or reverse that into some other vehicle as you know part of your overall value creation, so that's what we're in the process of doing at the moment with the company.
Fintan Walton:
Excellent. Well Robert Burns, thank you very much indeed for coming on the show.
Robert Burns:
Great, enjoyed being here.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Robert Burns
CEO
At the time of recording this PTV interview Robert Burns serves as CEO of 4-Antibody AG. Dr Burns is chief executive officer at 4-Antibody AG and is an experienced biotech business leader previously at Affitech A / S and Celldex Therapeutics Inc, both antibody discovery and development companies. Dr Burns joined 4-Antibody following the successful repositioning and refinancing of Copenhagen listed and Oslo-located Affitech A / S (AFFY, NASDAQ OMX). Prior to his time at Affitech, he was CEO at Celldex Therapeutics Inc (CLDX, NASDAQ) during the critical period of Celldex's emergence from Medarex through to its eventual merger into reverse NASDAQ-listed Avant Immunotherapeutics. Before his role at Celldex, Dr. Burns was at the Ludwig Institute for Cancer Research in New York, where he played leadership roles in the spin-out of several successful companies including Piramed in the UK. Prior to that he was Commercial Director at both Oxford Glycosciences, UK and British Biotech, UK, and previously AbT, Cambridge, Mass., and Ciba-Corning Diagnostics. Dr Burns is also non-executive Chairman of Haemostatix to early-stage UK company specializing in blood clotting products haemostasis and thus serves on the board of Oncos Therapeutics Oy, a Finnish developer of novel cancer therapies based on next generation oncolytic viruses.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
4-Antibody AG
4-Antibody AG is a biopharmaceutical company with a powerful fully-human antibody drug-discovery technology platform, which is generating an emerging pipeline of antibody therapeutics. The proprietary discovery engine is the in-vitro Retrocyte-Display technology, a fast and highly efficient source of antibody drug candidates. Retrocyte Display generated rates high quality therapeutic antibody drug candidates quickly using a rapid, high throughput, flow cytometry approach incorporating full-length IgG format human antibody libraries expressed in mammalian B cells (the cell designed by nature for optimal antibody display). 4-Antibody provides access to its technologies to pharmaceutical R & D collaborators but is also generating its own pipeline of antibody drugs. The Company's lead development product is an anti-cytomegalovirus antibody drug. 4-Antibody AG is a private company with strong, experienced leadership Commercially-located in Basel, Switzerland and Jena, Germany.