KaloBios’ Partnering Hopes




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Video title: KaloBios’ Partnering Hopes
Released on: March 03, 2009. © PharmaVentures Ltd
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With three clinical programmes currently in need of partnering, KaloBios has a very ambitious year ahead. At the beginning of 2008, Dave Pritchard, CEO, spoke to PharmaTelevision® about KaloBios' plans to raise more money through a corporate round of funding. Now he brings us up to speed on the successful closure of that series, along with Jeanne Jew talks through the company's high expectations for 2009.
Kalobios focusing on monoclonal antibody Therapeutics
Fintan Walton:
Hello and welcome to PharmaVentures business review here in San Francisco. On this show I have David Pritchard who is the CEO of Kalobios and Jeanne Jew who is the Head of Business Development at Kalobios. Welcome to the show.
David W. Pritchard:
Thank you.
Jeanne Y. Jew:
Thank you.
Fintan Walton:
Kalobios is a local company. It's based in South San Francisco just down the road. But it's a company that's been around for a while and it's focused on antibodies, it's specifically as therapeutic agents and David W. Pritchard you've been on the show before and welcome back.
David W. Pritchard:
Thanks, it's good to be here.
Fintan Walton:
So what's, how would you describe Kalobios today?
David W. Pritchard:
So Kalobios today is a development stage company. We focus on first in class Monoclonal Antibody programs. We have two programs in Phase II studies and one it's about a year away from an IND and we focus specifically on really exciting interesting targets and we have a variety of therapeutic areas that we are involved in.
Proprietary Humaneering technology
Fintan Walton:
So the, the basis you are a antibody based company there is a basis to the origins of Kalobios, you've developed your own technologies in Humaneering?
David W. Pritchard:
Yes.
Fintan Walton:
So tell us a little about that?
David W. Pritchard:
Sure we have a platform technology we call Humaneering which we would argue develops the best antibodies for chronical long-term treatment and that's predominately because they have a very low immunogenecity and in broad patient populations and we've designed these antibodies to be very close to germline which means they are close to the template that we all have to make our own antibodies so we all would regard them as self. But we've also been able to make them very specific and high affinity.
Fintan Walton:
Right, so that so that does that mean that you are focused more on chronic therapies or do you include critical care as well?
David W. Pritchard:
We've focused more on the chronic but one of our programs that you have hear about actually has applications both in chronic and in more acute settings.
Kalobios's current programs and strategy of selcting specific targets.
Fintan Walton:
Right, now Jeanne Y. Jew you've just joined Kalobios relatively recently, could you tell us just a little bit about the major programs that you got on currently?
Jeanne Y. Jew:
Sure I'll and our lead program is in Phase II clinical trial as David mentioned and that's an Anti-GM-CSFantibody and it's targeted against a number of different inflammatory diseases. So one of the things that makes this program a very exciting is that the it has broader capability. we are targeting our Phase II clinical trials first at RA and asthma but we also have pre-clinical trials supporting the number of different other indications including psoriasis and multiple Sclerosis and then a number of other targets that we haven't yet disclosed.
Fintan Walton:
Right, so those major programs David W. Pritchard, if I can ask you there as you've already mentioned they are in clinical phase how is the company, what sort of basis of strategic thinking are you putting into the choice of these particular targets because obviously though you like all biotechnology companies you got a limited resource so how do you how do you focus that?
David W. Pritchard:
So we set out in 2007 to conduct actually seven clinical trials in our two lead programs and we very carefully picked which are the indications we thought will give us proof of principal in humans, so our philosophy is what small companies do really well is take things out of research and into proof of principal in humans and at that stage we plan to partner them. So 2009 has always been our year of partnering. We finished five of those clinical studies at the end of last year. We have two that we will finish in the next quarter and Jeanne will be actively leading her team to partner those programs.
Fintan Walton:
So lets just go through-through those programs David W. Pritchard if we could, the lead program is is Pseudomonas?
David W. Pritchard:
So the Anti-GM-CSF program that Jeanne mentioned is as you said targeted to rheumatoid arthritis and asthma but has a lot of other indications as well. The second program as you said is the Pseudomonas program. We're doing clinical studies both in Cystic Fibrosis Patients there through the chronic application but perhaps even a larger market is in the Ventilator-Associated-Pneumonia market which is a critical care acute kind of setting. we are doing clinical studies in both of those. And then our third program is not in the clinic yet it's about a year away from an IND filing, it's a Novel [ph] target in the oncology space that targets in solid tumors the vasculature of tumors but also has activity for liquid tumors as well. So we are quite excited. So strategically to answer your question we picked these targets to be in to be drugs that really make an significant advancement of what's currently out there.
Partnering approach for 2009.
Fintan Walton:
So Jeanne Y. Jew these three programs you gonna be responsible for taking those forward into the into the partnering and activities for this year in 2009. So, so how you're going to approach that?
Jeanne Y. Jew:
We think we have three very exciting programs that partners will be interested in and as David mentioned they are in different therapeutic areas, so we have one program in information one in oncology and one in infectious disease. We expect that we are gonna approach big pharmaceutical companies that will have the capability in all of those different therapeutic areas and a lot of capabilities in development and commercializing those products. So our approach would be to target large pharmaceutical companies. We expect that given the data that we are generating that will go into generate a lot of interest and potentially competition between the companies.
Fintan Walton:
Okay, so do you see yourselves going just for one company to take all three programs or you looking to split that between different broad companies?
Jeanne Y. Jew:
So our goal is actually to partner each program and we'll try to find the best partner that we can to maximize the opportunity for each program.
Fintan Walton:
Right.
Jeanne Y. Jew:
If in fact through our decisions it turns out that a company might be interested in multiple programs we will engage in a broader discussion with them.
Corporate investors on board and investment of Genzyme and Baxter.
Fintan Walton:
Okay, so Davidthat means from your perspective obviously you've, one of the changes that has happened over the over the last year since we last talked is that you've managed to get some new investors on board particularly corporate investors. So tell us a little bit about those investors and how that came about?
David W. Pritchard:
Sure. Actually when we met last year and had this discussion what I have said was we were out looking for corporate investors to that really could add more than just cash, add some expertise and we were fortunate enough last year to get both Genzyme Corporation and Baxter Corporation to participate in our funding we've already raised over $32 million and Mitsubishi UFJ which is the largest bank in Japan also participated. And so we've started the interactions and dialog with those companies, it's has been quite helpful and " and clearly they're doing it for strategic reasons they are interested in the program we are working on and to provide the expertise be at clinical, be at scientific or be at even CMC expertise. So that's gone really well and as Jeanne Y. Jew said what we are finding is there number of companies who have interest in multiple programs and I think it will " it will be a very interesting year for us as we try to decide what " what's best for Kalobios.
Fintan Walton:
Right, when Genzyme and Baxter put that money into Kalobios was that a conditional investment or it's just they got just straight equity in the company?
David W. Pritchard:
It's really a straight equity investment, they get no product rights at all.
Fintan Walton:
Right.
David W. Pritchard:
But clearly they were attracted to us because of our programs and the core technology that we have.
Fintan Walton:
Right, so obviously Jeannethey are the first companies you may want to approach?
Jeanne Y. Jew:
Yes for obvious reasons, and Genzyme and Baxter obviously they've looked at the products and we'll continue to have on going discussions with them.
Fintan Walton:
Right.
David W. Pritchard:
It's clear but what we are really trying to accomplish is a level playing field as well so we'll talk to a number of other firms and they will have the same information and the same access to data that our corporate partners will have.
Fintan Walton:
So they don't get any particular preference?
David W. Pritchard:
They do not.
Fintan Walton:
They already have the preference by the fact that they've been an equity player?
David W. Pritchard:
Right, and have had access to the information already.
Fintan Walton:
Right, okay. So back to you Jeanne Y. Jew. You talked about you know the economic climate here currently in 2009, so from a tactical position going into negotiation with these pharmaceutical companies, do you see the economic climate having any different influence in a way you would approach this say compared to the way you would have approached this may be several years ago when the markets were little bit stronger?
Jeanne Y. Jew:
I think the fact that we were able to close in our series staying ground with corporate investors is a testament to the excitement of the products. So I recognize it -- it's a very difficult economic climate but we think that there is gonna be lot of interest in our programs giving the exciting that we've already generated in our discussions in series deal.
Way forward for Kalobios: Looking for Co-promotion, Co-development and Profit sharing deals
Fintan Walton:
Okay, good. So back to you then David W. Pritchard about the companies going forward I mean you clearly got your corporate investors on board, you've got that funding in hand, and you've got cash in the bank which were all critical things for biotech companies these days, assuming that this this partnering program is successful and of course there is no reason why it shouldn't be. What is that what's the way forward for Kalobios?
David W. Pritchard:
That's a great question and I think a lot of that will actually depend on the kind of deals that we we see. So we have, I would say several options and that's the beauty of trying to partner three at once. We don't really need to partner all three we can choose to partner some and may be keep others for our own use. So that the main options that I see is one we could partner some of our programs perhaps two we are looking for particularly co promotion, co development profit sharing deals. I've been told by my investment banking friends there has never been a private company that's had two of those so that could possible lead to a really interesting IPO when the markets perhaps turn in 2010 or beyond. We also might choose to maintain some of the rights to some of the programs either through as I mentioned co promote or even in the Pseudomonos program for example we might choose to retain the rights in the US, that's another interesting option there are few this pharmaceutical for instance has done that quiet successfully and that's the model that Wal-Street likes too. And then finally the the other outcome that's also potential that we have talked with our team about is if a company a large pharma or big biotech like two or more of our programs it may just be more efficient for them to acquire the company and so we may end up being part of a large organization. So it will be a really deciding year for us to see which way we go.
Kalobios's IND capabilities and big pharma to continue acquisitions .
Fintan Walton:
Right, so but in that situation where you you're potentially bought up by major pharmaceutical company clearly that's a return for share holders that's very important but what would be, when if they did acquire your company what else is there inside the company that's worth more than the the three programs that you have just mentioned?
David W. Pritchard:
That's a great question. So we have what I call a real great IND [Ph] engines, so we've been able to show we can file an IND [Ph] a year for the last four years and these are exciting first in class programs so we have a scientific group that has a very high productivity and it's been able to continue to generate these ideas and I have now had three companies that have been part of that have been acquired two of them really have been made significant research sites for the parent so the last one was a company called Rinat Neuroscience, we saw the Pfizer in 2006 and Pfizer made Rinat, [PharmaDeals ID = 23901] the worldwide headquarters for biologics similarly in the in the 90s I also saw a company called Triton Bioscience and at that time Schering(indiscernable) buyer has that has a significant research facility. So I think big pharmas continue to looking for companies that have have that excitement the bay area is a just a wonderful place to do that, you have really talented people it's the garage kind of entrepreneurial mentality we come up with these wild and creative ideas and I think that's what the drug industry needs right now.
Fintan Walton:
Right.
David W. Pritchard:
Some really new innovative ideas.
Fintan Walton:
And some of the pharmaceutical companies are trying to recreate that within their own organization just to try and and generate that too?
David W. Pritchard:
Absolutely, but it's tough particularly in biologics. A lot of the large pharma's corporations as you know a predominately chemistry oriented we are really focused on Monoclonal Antibodies.
Fintan Walton:
Right, well I like to thank both of you David W. Pritchard and Jeanne Y. Jew for coming on the show. Thank you very much indeed.
Jeanne Y. Jew:
Thank you very much.
David W. Pritchard:
Great. Thank you
Jeanne Y. Jew
Head of Pharmaceutical Business Development
David W. Pritchard ,Chief Executive Officer David W. Pritchard, Chief Executive Officer joined Kalobios with more than 25 years of experience in general management, business development and financial management within the biopharmaceutical industry. Most recently he held the position of CBO at Rinat Neuroscience Corporation, where he managed the negotiations on the acquisition of Rinat, by Pfizer, in 2006 for a reported $500 million. Prior to that he was CFO at Matrix Pharmaceuticals, and managed the sale of the company to Chiron Corporation in 2002, now Novartis. Between 1992 and 2000 David served as VP, Business Development and CFO of Metabolex, Inc. where he completed three rounds of financing and negotiated four worldwide corporate alliances with major pharmaceutical companies, and in-licensed metaglidasen. He started his biotechnology career at Triton Biosciences, Inc. As one of the founding managers, where he held various positions including heading up the sales and marketing efforts, commercial development, a business unit, and ultimately managed the sale of Triton predominately to Schering AG, now Bayer. Triton developed Betaseron for multiple sclerosis(2005 sales exceeded $1 billion), and Fludara for leukemia. David holds an MBA degree from Stanford University, and a BS in Chemical Engineering from Cornell. Jeanne Y. Jew, Head of Pharmaceutical Business Development Ms. Jeanne Y. Jew, Head of Pharmaceutical Business Development, joined Kalobios with over 15 years of experience in business development in the biopharmaceutical industry. Previously Ms. Jeanne Y. Jew served as Vice President, Corporate and Commercial Development at Onyx Pharmaceuticals, Inc. From 2002 to 2007 where she was responsible for all business development activities. Prior to Onyx Pharmaceuticals, Ms. Jeanne Y. Jew served in positions of increasing responsibility at Coulter Pharmaceutical and became Vice President, Business Development following the acquisition of Coulter Pharmaceutical by Corixa Corporation. Ms. Jeanne Y. Jew has also held business development positions at Scios, Inc and Genentech, Inc. Ms. Jeanne Y. Jew holds a BA in Psychology from Wesleyan University and a MBA in Business Administration from Cornell University.
Kalobios
Kalobios Pharmaceuticals, Inc., a U.S based, private monoclonal company, uses it's proprietary platform technology to develop first or best-in-class human antibody therapeutics. The company's proprietary Humaneering technology offers advantages over other methods of human antibody creation in terms of immunogenicity, potency, and manufacturing yields. The company focuses on partnering it's clinical-stage programs and also grants limited access to it's Humaneering platform to select partners. Kalobios was formed in 2001 and merged in 2004 with Celscia. Since the company's founding, it has raised a total of $68 million in four rounds of venture funding with the major shareholders being MPM Capital, Sofinnova Ventures, Alloy Ventures, GBS Venture Partners, Mitsubishi UFJ Capital and Genzyme Ventures. The company is headquartered in South San Francisco, CA and has approximately 50 employees.