Addex Pharmaceuticals and the Pursuit of the True Innovation




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Video title: Addex Pharmaceuticals and the Pursuit of the True Innovation
Released on: May 01, 2008. © PharmaVentures Ltd
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In this conversation with Dr. Vincent Mutel, co-founder and CEO of Addex Pharmaceuticals, Fintan Walton reveals how the Addex mission—to achieve true innovation—has contributed to the tremendous success of this young biotech company. Addex discovers and develops allosteric modulators, with a focus on those that target G-Protein Coupled Receptors (GPCRs), a class of receptors that have proven therapeutic utility in many diseases. Dr. Mutel believes that this kind of innovative approach is the mission of biotech and that this innovation is the “currency” of biotech and will provide the necessary funding for worthwhile projects. Addex has seen its own work validated through high-profile deals with Johnson & Johnson and Merck & Co. and a 2007 IPO offering that was one of the largest in Europe for several years.
Addex Pharmaceuticals: Origins and the choice of allosteric molecules.
Fintan Walton:
Hello and welcome to PharmaVentures Business Review here in Madrid. On this show I have Vincent Mutel, who is the Vice Chairman and CEO of Addex Pharmaceuticals welcome to the show.
Vincent Mutel:
Welcome and good morning and happy to be together with you today.
Fintan Walton:
Vincent one of the key things here is you are a founder of Addex and you've had a long history in the pharmaceutical industry itself and why did you set up Addex?
Vincent Mutel:
I think we, all founders as we are, we were four founders at the beginning of the company came from the pharma industry. And I've been working in this industry for lets say 15-years, I was working at Roche in Basel in the CNS area and decided in 2001 that I think I knew enough about this drug, I was having large experience in the large pharma organization and it was time for me to look for another challenge in particular as I said as a joke, we were always you know criticizing to a certain extent management and I said to myself now it's time to show and to see if it's so easy on the other side.
Fintan Walton:
Right. So but Addex itself has been incredibly successful since those early days when you thought that way and one of the key things I suppose is your choice of molecules that you want to try and discover and these where the allosteric-molecules, why did you choose that particular area?
Vincent Mutel:
I think it came from the observation that large number of possibilities that we were exploring in the pharma were difficult to reach in particular the G-protein coupled receptor family which is a very interesting family was not particularly successful and it's still not particularly successful with the critical approach. So the observation was that there was another way potentially to address it this way was the allosteric-modulation which when we started the activity in the company was very much a curiosity people knew it was possible to do that with GPCR but was not explored and exploited on the industrial basis and that is what we decided to do at Addex say there is a potential which has been untapped if we can make molecule using this principle which are able to reanalysis let's say receptor (indiscernable) which have been abandoned by the pharma that could be very, very interesting for the future.
Fintan Walton:
So when you set your vision to target those types of molecules one of the key things obviously is that you need to bring the right people into the organization, you are based in Geneva, where all the people you brought in based in Switzerland already?
Vincent Mutel:
No, we assembled a group of experts, I consider the best group of expert in the world to work on this specific problem coming from various organizations in fact coming largely from large pharmaceutical organizations and that is very important because the scientific challenge was there and we had to find the way to industrialize the process, be able to find out a statement rate on our competitive way but also we have to have very high quality of drug development because our target was to sell our product to the large pharma and so we have to develop drugs the same way as they do, not in term of the power that we can put in but in term of the quality.
Early financings and the potential of allosteric modulation.
Fintan Walton:
Now the early financing of the business where did you get that money from?
Vincent Mutel:
So it came mostly from European VC's which have been true believer of the adventure since the day one, since even day zero because they received funding to the creation of the company and participate to each round of investment which were always very substantial because we cannot do the odd development if you want to target the large pharma organization you have to have very you know good assets and the investment is in general quite substantial, so the Series A was quite large, the Series B was very, very large, the Series C was different because we wanted to enter or to have new type of VC to enter and we have been backed by SR One [PharmaDeals ID = 25425] which is the venture arm of GSK, we were looking for pharma investment in fact at this stage and so through the partnership we had established at that time also to have a kind of validation of our proposition by our peers which are the large pharmaceutical organization.
Fintan Walton:
Right. Now obviously with those rounds of finance you are able to build, start to build Addex as a company and you achieved the goal of continued focus on allosteric-molecules but in the way you've in my view you look like you became a neuroscience based company, you may disagree with that as well
Vincent Mutel:
You are right, you are right we are, we cannot deny that this is a legacy that we have from the first day, we were acting the company back on our experience, I think very important aspect of this business is to understand the needs of your clients, our clients are the large pharmaceutical organization and we were very well placed to know what is necessary for the pharma in term of unmet medical need and in term of target which are able to fulfill these needs, so it was natural for us to go to the CNS, but then we invest on the technology we were able to show that it works on the systematic basis and then we opened up new possibilities looking at market potential at let's say targets which were left aside and we have decided then to concentrate now on other type of activities which are metabolic disease type of target for diabetes type 2 and obesity for example and the very new one is inflammation because the potential of the allosteric-modulation into this target into this field is enormous.
Deals with Johnson & Johnson and Merck.
Fintan Walton:
Okay. So you've talked about your pharmaceutical clients and lets look at some of those deals that you have done with some of the pharmaceutical companies, you've done a deal one of your first deals with Johnson & Johnson [PharmaDeals ID = 19005] and since then you've done two deals with Merck, you want to tell us a little bit about the J&J deal that you did?
Vincent Mutel:
Absolutely, the deal we signed with J&J was a partnership for early stage collaborations we were in lead optimization for target which is considered to be one of the best target today for the treatment of schizophrenia and anxiety this is coming from the work done my Eli Lilly at the time it was known that this target was clinically validated for anxiety, recently Lilly validated target as well for schizophrenia in man, so it's an enormous interest which was already existing at the time for this target. And we start the partnership with J&J which was very, very exciting very interesting the first in fact validation of our approach because it's on allosteric-modulation essentially on a very interesting target which was very difficult, very intractable by the industry and so this was the first validation by the pharma very useful for our fund for our funding at that time so it was in fact very close to the C round and so we had the number of advantage to move forward into this direction. We had then been working quite a lot and very fast on other interesting targets and been able to put to maturity to target one which is the mGluR4 for Parkinson's disease which we signed this deal in 2007 with Merck, [PharmaDeals ID = 29082] very novel approach again, a good example of a technology which is essential today as which is providing potentially a new way to treat Parkinson. And the last one we signed in 2008 [PharmaDeals ID = 29336] it's about new therapy for schizophrenia particularly interesting because corresponding very well to the unmet medical need in schizophrenia which is the treatment of the cognitive deficit into these patient. So three deals with very large organization meaning high quality of product, high quality of development extremely good understanding between the scientific teams working together and very large unmet medical need for this product.
Fintan Walton:
The last deal you did with Merck was quite a big deal, isn't it?
Vincent Mutel:
Yeah.
Fintan Walton:
It was 22 million upfront?
Vincent Mutel:
It is one large deal, in particular if you consider the stage of the product the compound in consideration ADX63365 was at the technical stage and we obtain terms which were very, very spectacular, I think 22 million upfront is quite large for molecule at this stage and overall the milestone payment exceeds $700 million which is quite remarkable as well. I think it's simply illustrating the potential of the technology, the potential for us to open or to provide solution which are corresponding to unmet medical need and the pharma is prepared to pay this amount of money because if you provide really a real true solution for large indication for which there is a real need for new therapy you obtain more or less very large amount.
True innovation.
Fintan Walton:
So you, are you saying that as long as the biotechnology company has it's it can be seen by the pharmaceutical company as one that has got high quality science coming through it and it has already done the right types of experiments and the right type of approach then you are more likely to get a better upfront payment than it one which has got probably less, less steerage lets say in the direction its going in its research programs?
Vincent Mutel:
I think it's about true innovation. What does it mean true innovation? True innovation in pharma is not an improvement of an existing scene it's not a me too approach, it is really something where you have a change in concept where you can bring something which correspond really to what the pharma is looking for. And we were able to do that because coming from the CNS we knew what is the Holy Grail is in CNS drug discovery today in schizophrenia. It's easy to improve memory and memory deficit in schizophrenia in addition to potentially play positively on all the other symptoms to be able to cure positive symptoms and negative symptoms. So if you are really identifying something which provides you with this type of characteristic that everybody is understanding immediately that the business development for the mGluR5 positive allosteric-modulators for this compound that we sold to Merck was a pleasure because there is no need to convince people because it is so obvious to them that it is corresponding to what they were looking for and then the pharma is ready to pay the price for innovation. I think we have to be clear. The biotech has a mission to provide innovation this is our currency, this is what we can monetize and this is what exactly I think in the future we will do more.
Fintan Walton:
So it's coming back to this original idea of going and targeting allosteric-modulators which are appropriate for those types of diseases?
Vincent Mutel:
Absolutely and showing to the pharma industry that we can do high quality product, very promising drugs and showing as you absolutely rightly pointed to showing efficacy in vivo and showing the differentiation type of experiments that people wanted to see to say hey that is really something new this is something that payers will be prepared to pay for because that correspond to exactly what they are looking for an improvement radical change in the way to treat patient.
Reasons for Addex Pharmaceuticals's biggest IPO.
Fintan Walton:
Right. Now it always seems to me that Swiss biotech companies are very successful in raising money, they always raise a large sums of money and you've managed to get very good deals with pharmaceutical companies and the other component is success in flotation because you are also floated on the Swiss stock exchange, I think over a year ago now or just under a year ago and you've raised a significant amount of money, probably one of the biggest of IPO's How do you do that and why it what was about Addex that made people pop up the money?
Vincent Mutel:
We were blessed for two things first because we have a proposition which is I think the acquaintances of what you can propose in the biotech environment it is a true innovation, it is a true potential, I think I remember one quote from one of our investor he said I don't know if you are going to succeed with these, but if you do it's going to be enormous.
Fintan Walton:
Yeah.
Vincent Mutel:
And this is exactly I think what VC's are backing, this is the type of adventure they would like to be able to fund more often. So this was already something different, we were having a proposition we were not having a single product, we now today we have 15 project in development it's a enormous number of projects for company of our size. So we were having a proposition which was coming at the right time with good product, with validation of the pharma and an enormous by planning in the back, so everybody was very, very enthusiastic about Addex. And the second thing which was very favorable for us was that we were on the Swiss market, we are Swiss company and we floated the company in the Swiss market and Switzerland is in a privileged position today, because I think it's the silicon valley for the life science in Europe certainly because there is a big knowledge about the dynamic of the life science because of the big players in the country. And there are several big players in the country and people are used to life science they have a high respect for it they have a high understanding so the investor base we have is very informed, is very knowledgeable.
Fintan Walton:
Right, right. So it is the ideal environment for launching biotechnology companies?
Vincent Mutel:
I think so, I think beside the privileged position to be having an organization in Switzerland which is having system which is very favorable for enterprise, I think it was really a very good position, a very good proposition and particularly an excellent time, because two months later that has changed.
Fintan Walton:
But do you think that all the science that was done in Addex could have ever emerged within a pharmaceutical company in the same period?
Vincent Mutel:
That's an interesting question and very often people ask me why are you really want to do that, because today we are the only one more or less to do that. I think it's a problem of deep perception of what are the (indiscernable) intrinsic value that people were looking for and putting the things together in you know in - say well we have this untapped series of target which are existing for which the pharma is knowing that they are going to provide drugs if you succeed to do it and on the other hand the technology which was - yeah not the technology it was the lab curiosity as I said there was a lot of scientific knowledge about it and but nobody said well lets put this together, lets take the good targets the one people would like to have compound for and the technology assemble that and put it in industrial setup and we have to do that having the biology to run that through specific tools that have been developed through the talented people we hired but also the chemistry, very important chemistry allosteric-modulation easily found in term of chemistry and very clearly as our tools that we have developed which are we have a library of compounds which are all allosteric-modulator who are probably have a unique collection of allosteric-modulator and computational chemistry (indiscernable) for example.
Future plans.
Fintan Walton:
So where does that it's going into the future, does it ultimately become a part of the major pharmaceutical company or will it develop itself as a competitor for Roche and Novartis?
Vincent Mutel:
I don't think we are here at the biotech to be acquired, it's there is a mythology about it which I think is for me very strange, if you quit a large organization with the desire to create a sustainable business with the ambition to be a key player in the future you don't really look at the potential for going back to the pervious to square one to a certain extent easily, now this said we have to be responsible of what we have created. And we have today an extraordinary hit machine an engine which is doing superior drug in term of finding new solution with very high quality. So we have to pay a certain price which is we have to find intelligent way to move forward not to comprise the engine and the spirit which is inside which is we want to target large indication and that is forcing us to as you said to deal with large pharma in fact all the possible way we have a piece for sale, we have clearly a number of opportunities which are very interesting, very attractive on opportunity basis for the large pharmaceutical organization. We'll have to find a good equilibrium and we have to find potentially for Addex ways to move forward in term of strategy which are differentiated. And I think what we do today is to try to use our currency, the innovation that we have is can be monetized to provide to the organization a difference differential way to move forward and to offer potentially a way for the company to create value in a different way say access to market for example and have all the chain of production and to legislation for drug development for example.
Fintan Walton:
Vincent Mutel, thanks indeed for coming on to the show. Thank you very much indeed.
Vincent Mutel:
Thank you very much, it was a pleasure.
Vincent Mutel
Chairman and Chief Executive Officer
Dr. Vincent Mutel is the Chief Executive Officer and Vice Chairman of the Board of Addex Pharmaceuticals. Before co-founding Addex in 2002, he served as Head of the Pharmacology Group in the Central Nervous System diseases department at Roche, where he coordinated the activity of several research laboratories involved in drug discovery and development. As Head of the Pharmacology Group, he was a member of the Board of Research Area Heads and contributed to strategy setting for the Roche CNS Research Department. Dr. Mutel has a broad experience in drug development, from screening through to the start of human clinical development. He is co-author of more than 60 research publications and co-inventor on 20 patents for CNS drugs.
Addex Pharmaceuticals
Addex Pharmaceuticals discovers and develops allosteric-modulators; small molecule therapeutics agents that may offer more sophisticated ways to normalize biological signaling perturbed by disease compared to classical orthosteric agonist or antagonist drugs. The Addex discovery capability has been validated through three deals with big pharma. The first deal, with Johnson & Johnson, is focused on development of allosteric-modulators of metabotropic glutamate receptor 2 mGluR2 for anxiety and schizophrenia. The second and third deals, with Merck & Co., are focused on developing allosteric-modulators targeting mGluR4 and mGluR5 to treat Parkinson's disease and schizophrenia, respectively. The company has a growing pipeline of products in clinical or preclinical development for major market indications including: gastroesophageal reflux disease (GERD); migraine; anxiety; smoking cessation; depression; spasticity; type II diabetes and fertility. In May 2007, Addex completed an initial public offering on the SWX Swiss Exchange, raising CHF137 million ($111 million/83 million). The IPO was the largest biotech IPO in Europe in three years.