The Diversification of Biotecnol




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Video title: The Diversification of Biotecnol
Released on: February 03, 2009. © PharmaVentures Ltd
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Biotecnol is proof that a hybrid business model works. As its CEO, Pedro de Noronha Pissarra, explains in this interview, the revenue stream created by its contract research and manufacturing arm not only kept the company alive but also helped the company build up its platform technology. Recently, Biotecnol took the decision to separate the two businesses and is currently looking to raise capital for the development of its own pipeline. Here, Dr. de Noronha Pissarra describes the emergence of this unique Portuguese company and how he is focusing his efforts on raising the needed cash.
Origin of the business and its hybrid business model.
Fintan Walton:
Hello and welcome to PharmaVentures business review here in Mannheim, Germany. On this show I have Pedro Pissarra who is the CEO of a company called Biotecnol in Portugal. Welcome to the show.
Pedro de Noronha Pissarra:
Thank you very much. Good morning Fintan. Pleasure.
Fintan Walton:
Good morning to you. Pedro Biotecnol is a company that is focused on antibodies . It's quiet unique as it's a Portuguese company. It's built, it's presence up there over the last ten years. Tell us a little bit about the origins of the business and it's current business model?
Pedro de Noronha Pissarra:
It's a good proof that the hybrid model still works. we started as traditionally as a company doing services for third parties, contracted research, manufacturing development nothing very sexy about biotech in those days and we built upon developing our own pipeline every time. Nowadays we still keep both activities in terms of hybrid business model and but clearly we separating the two businesses in order to focus more on the antibody platforms. So we have this platform called the Tribody platform which it builds upon multifunctional antibody derivatives so that we can target two receptors or two targeting sites at the same time and build in a effective functions. But we are gonna keep still the contract manufacturing part because it creates quite an interesting revenue stream for the company.
The Tribody platform technology and competitive advantages.
Fintan Walton:
Right. So the business models are hybrid model that clearly it's important that when a company has got two components to it contract research manufacturing components as well as a research component that it has to be able to one has to fund off the other to some extent. Now as you say you have got the actual platforms that you've developed and some of that you've acquired overtime and if you mention the Tribody platform technology what is it about your technology your skill set that differentiates you from other players in the field of antibody development?
Pedro de Noronha Pissarra:
Okay. It's I would have to say it's the integrated capability to go from the early stage research up to build the full CMC package with the benefits of a scaffold in the antibody field which is allows you to target several receptors at the same time, be multifunctional. For example target CD20 and CD19 targets in non solid tumors . And build upon recruiting effective functions. And that is particularly nice since we've got the integrated capability to do contract research for the people so that they pay you to do the work to discover these molecules, they get filing of their patents from the novel composition of matter but at the same time you are actually pushing forward an entire development program right from the discovery down to the licensing and then you make money on your services development services but also you make money on your licensing. The platform itself is very unique because of this flexibility in building various effective functions right from 80 cc to T-cell recruitment.
Differentiating internal pipeline and contract manufacturing development into two separate companies.
Fintan Walton:
So the technology that you the practices that you have got within Biotecnol is obviously has to be molecular biology and genetic antibody engineering?
Pedro de Noronha Pissarra:
Antibody engineering very specifically yes.
Fintan Walton:
And you've got that skill set but when you are working with a clients company on your contract research or contract manufacturing particularly on the contract research presumably they own all the as you say they own all the technology at that stage they own all the sorry any of the products that are produced at that stage but presumably you have other types of relationships or other activities where you are developing your own particular products. How do you differentiate between the two?
Pedro de Noronha Pissarra:
You gotta to start by giving stability to the company in terms of creating a study cash flow so of course I mean if you look at the other companies around the Ablynx model is good example. It's something we've looked at and it's pretty much it's very similar. You've got to stabilize the company in terms of cash flow like I said so priority is being given over the last few years in order to do contracted research and then making money on your licensing strategy and your fee for service your cost plus during the development process but we got to a stage that we have to start focusing on our internal pipeline in our own products and that became a bit of problem because at a certain time you need to separate the waters and say okay or you a contract research or you a drug discovery company
Fintan Walton:
Right.
Pedro de Noronha Pissarra:
And we found the answer to your question simply by having two independent completely different units.
Fintan Walton:
Right.
Pedro de Noronha Pissarra:
So now we have got two different companies that one does contract manufacturing development I feel that's the correct word development and then contract manufacturing, contracted research and the other one has got our own internal pipeline and they are completely separated now and so --
Financing of the company.
Fintan Walton:
The other component to your company which is interesting is the financing of the company because you got a obviously venture capital backers and so forth and you've also been at stages several years ago making some acquisitions as well so just tell us a little bit about that side of the business too?
Pedro de Noronha Pissarra:
It was extremely hard to finance such a company. Portugal is not has not been a hallmark for biotech people would ask what are you doing in Portugal? Initially that was very, very difficult. After we surpassed this geographical risk it was fine so we managed to raise funds locally not really specialized investors or specialized capital but it was done and that kept us kept us alive for a while. Of course the dimensions you are looking at three four and really near us in terms of rounds so we have raised something in the area of about 8 millions Euros over the last six years. It was this really hard but again a way to finance our activities has been through contracted research. That has been really what has what has kept the company going for a while.
Fintan Walton:
Right.
Pedro de Noronha Pissarra:
But now as you rightly pointed out funding it's becoming a necessity. So we having a pipeline of our own products is extremely expensive to run, so once we separated the two activities altogether now we need to go into the markets and actually fund ourselves properly to take us to the other level that will be a level of the pipeline.
Selections of targets and products in pipeline.
Fintan Walton:
Right, and that the products that you've got in clinical or pre-clinical development currently is under the lab moving into phase I clinical trials. The targets that you have gone to some of those when I was looking at the information on your company are established targets and so what's the rush now there? What are you how are you selecting those targets and so forth?
Pedro de Noronha Pissarra:
We look at universities, so this is the first I just have to look at what's out there what are the areas which are not so crowded we avoid areas like RA, Rheumatoid Arthritis because it is very crowded. There is lot of people there a lot of expertise a lot of products already there so we avoid those. We look at unmet needs of drugs that that are on the markets in renal cell carcinoma for example that is a good example of how we selected the target. We went to the University Louis Pasteur in France and Strasbourg [PharmaDeals ID = 33720] and we looked at it is very interesting target knowing there is not much in renal cell carcinoma it's there clearly unmet needs.
Fintan Walton:
Yep.
Pedro de Noronha Pissarra:
In metastatic forms of renal cell carcinoma in advanced or right at the late stage of Phase III there is nothing out there. So we looked at the clear unmet need not very crowded and we thought okay we can get a very strong intellectual property intellectual property on this targets by selecting the targets, doing our own molecules against these targets patenting the novel composition of matter and move the project forward and then keep filing additional patents on that specific field and we have adopted that for several others.
Products that are currently in development and the need for raising capital.
Fintan Walton:
Right. So how many products do you currently have in development?
Pedro de Noronha Pissarra:
We have got four in development, two are early stage products and two are in mid stage pre clinical.
Fintan Walton:
Okay. Now so clearly as you said there is probably a need now to start raising capital?
Pedro de Noronha Pissarra:
Yes.
Fintan Walton:
For your company it's not exactly the best time of economic cycle to do so?
Pedro de Noronha Pissarra:
It's I tend to think that this crisis is pretty much for the banking sector I would say that this funds did the got the money there most of the funds we spoke to most of the people that we got around the table they need to invest their resources. The funds are there they need they meant to be spent. So I think this sector is still pretty immune to the crisis.
Fintan Walton:
Right
Pedro de Noronha Pissarra:
But I may be wrong there actually.
Biotecnol plans for taking the service side of the business forward
Fintan Walton:
Right, yeah well know well it's I would say from talking to some venture capital groups there is definitely money out there and they will back good projects and that's not just here in Europe but elsewhere else in United States and in AustraliaNew Zealand I know it's true so clearly then to take those products forward it's going to be key, while you do that you are still back with your service side of the business continuing in that field and what are your plans for that side of the business?
Pedro de Noronha Pissarra:
It's gonna go independent completely, be run independently. We have got the management team in place for that that is now actually moving ahead solo on it's own. My intervention in that business is pretty minimum at this stage. I will get less and less involved as time goes by and I will focus personally in my efforts in raising the next round of financing just for the product side in a completely different structure in a completely different company so it would be two different entities
Fintan Walton:
Right.
Pedro de Noronha Pissarra:
Altogether.
Fintan Walton:
Distinct entities?
Pedro de Noronha Pissarra:
Distinct yes, correct.
Hybrid business model and the danger of losing that model by diversifying.
Fintan Walton:
Right. Correct. So in the future clearly when you have those sort of that of business model you have emphasized how important is to have hybrid business model. is there a danger that you lose the model by diversifying so much?
Pedro de Noronha Pissarra:
Yeah, we thought about that and we had to make two clear decisions. One would be to join the two and become just one company doing (indiscernable) and take Amgen doing everything internally but that will be tremendously risky because you would have a lot of cost so or the other decision would be to separate the two. I know for sure that eventually this will create options for us also for exits for shareholders but the assets which is the contract research part will always be there and what we are gonna do with it is a different story altogether. It depends on the opportunities and the offers we get and
Fintan Walton:
Right.
Pedro de Noronha Pissarra:
People tried to acquire us in the past it's known just for the expertise and the skills of those people that we employ, we employ about twenty eight people in the Lisbon site just on a contract manufacturing and that's an asset on it's own. I don't think we are gonna lose entity. I think the Biotecnol name is there on the contract manufacturing now just need to spin off the products and going to raise the cash. What happens after that it's pretty much opportunistic.
Fintan Walton:
Well thank you very much indeed Pedro for coming on the show and telling us all about Biotecnol.
Pedro de Noronha Pissarra:
Thank you. Thanks very much for your invitation. Thanks.
Fintan Walton:
Thank you.
Pedro de Noronha Pissarra
Chief Executive Officer
Pedro de Noronha Pissarra, CEO- Biotecnol Dr. Pedro de Noronha Pissarra obtained both his B.Sc. and Ph.D. in Biotechnology from Kings College London University of London. He carried out research at several institutions, including the Chemical Engineering Department of Massachusetts Institute of Technology M.I.T, Cambridge USA and at the Centre for Process Biotechnology (CPB) of the Technical University of Denmark, Lyngby, Denmark. In 1999 he finished a 12 months Masters Programme in the Science & Technology Management and Commercialization offered jointly by the IC2 Institute at the University of Texas, Austin, USA and Instituto Superior T"cnico, IST, Lisboa, Portugal. As well as founding and chairing the Portuguese Bio-industries Association (APBio) Pedro de Noronha Pissarra has been a member of the Advisory Group of the Biotechnology & Finance Forum, organized by the European Association of Security Dealers and Automated Quotations (EASD), and the European Commission's DG Research, a board member of Vida Rhein SA a German-Portuguese joint venture dedicated to Hepatitis B vaccines development, a member of the National Council of the National Entrepreneurs Association (ANJE) and is a member of the Emerging Enterprises sub-board of EuropaBio. Dr. de Noronha Pissarrais presently a member of the Superior Counsel for Science, Technology and Innovation of the Portuguese government, where he advises the Minister of Science and Technology and is also a visiting professor at the Catholic University of Oporto, where he teaches biopharmaceutical sciences.
Biotecnol
Biotecnol is a biopharmaceutical company focusing on the discovery, engineering and development of novel multifunctional antibody molecules, directed to key therapeutic targets. Based on it's Tribodytechnology, Biotecnol is developing a pipeline of products for application in major disease areas such as oncology . Founded in 1996 as a consultancy company, Biotecnol is now regarded as a pioneering Portuguese biotechnology company, and due to it's track record is considered to be the country's leading pharmaceutical biotech company. Today the company has expanded it's activities to the USA where it envisages carrying out it's product development activities.