Chroma Therapeutics’ Deal with GlaxoSmithKline




Episode Loading...




PharmaTelevision requires Javascript enabled and Adobe Flash Player to watch our programmes. If you do not have Flash installed, you can download it for free from the Adobe Flash homepage.

Improve your Internet experience and start watching exciting new video content.

Video title: Chroma Therapeutics’ Deal with GlaxoSmithKline
Released on: September 08, 2009. © PharmaVentures Ltd
Share/save this page:
Email
Bookmark
Facebook
Twitter
LinkedIn
Follow us:
RSS
Twitter
  • Summary
  • Transcript
  • Participants
  • Company
At the BIA Leadership Summit, Dr Fintan Walton spoke to Ian Nicholson, CEO of Chroma Therapeutics. They discussed:

• Chroma’s deal with GSK

• the key to Chroma’s novel chemistry platform technology and the importance of having a platform when running a biotech company

• biotech funding and the importance of government support for the industry

• how deal making has changed in the last 20 years, including the relationship and negotiating power between pharma and biotech companies

• the next big thing to come out of Chroma
The key to Chroma Therapeutics's novel chemistry platform technology.
Fintan Walton:
Hello and welcome to PharmaVentures business review here at the BIA Leadership Summit here in Hertfordshire in the UK. On this show I have Ian Nicholson, who is the CEO of Chroma Therapeutics. Welcome to the show.
Ian Nicholson:
Thank you, Fintan Walton.
Fintan Walton:
Ian Nicholson, as I said you head up Chroma Therapeutics, Chroma Therapeuticsis based in Oxford, or near Oxford in the UK. You are a biotech company emerging with new technologies with new capabilities, could you describe for us what Chroma Therapeutics is about, your technology and where your company is positioned in the biotech industry?
Ian Nicholson:
Yes of course Fintan Walton. So we are really an emerging pharmaceutical company in many respects. Primarily based around a discovery and development platform. The company really has two aspects to it's asset base. The first is a set of clinical oncology assets which are all small molecules. Initially the company was founded around chromatin and chromatin based targets, so we have three assets in the clinic now. Our lead asset is a protein pivotal studies in the second half of this year in 2009, but in addition to that we have a very interesting and quite novel chemistry platform technology, which is really quite an unique platform that gives rise to the ability to target small molecule drugs orally to leverage small molecule drugs to macrophages and monocytes. And we think this is a very robust platform that can be applied not only in a different variety of therapeutic settings but also across the range of targets and chemistries.
Fintan Walton:
So the origins was around obviously around chromatin ?
Ian Nicholson:
Yes indeed.
Fintan Walton:
in biology and understanding that microbiology. But this was the platform you talked about, was actually licensing and you acquired it or how do you do that ?
Ian Nicholson:
No, no not at all we've developed that -- all that chemistry over the last few years or so.
Fintan Walton:
Okay. So it's an internal program?
Ian Nicholson:
Internally home grown entirely and we filed roughly 30 patents for all the programs that have come out of that platform chemistry. So it's a broadly applicable. We think it's quite transformational, a platform chemistry which is applicable across a whole range of targets and chemistries and allows us as I say to target drug selectively to a cell type macrophages, which of course play a key role in number of disease areas.
Fintan Walton:
And what's the key to the chemistry?
Ian Nicholson:
The key to the chemistry are series of amino acid ester Motifs , which we attach to traditional small molecule drugs in a specific way using a variety of linkers. Those linkers which are very critical to the way that technology works. Those linkers are cleaved, so the ester is cleaved intracellularly to an acid by series of enzymes called carboxylesterases and so Serendipitous we discovered that one of those either forms of carboxylesterases which is present only in the cells that are monocytes-macrophage lineage, so therefore we can use that facet of the technology to deliver small molecule drugs directly to macrophages.
Fintan Walton:
So it allows the drug to get to the target?
Ian Nicholson:
Get inside the cell, get cleaved inside the cell.
Fintan Walton:
And then cleve [ph] there is a prodrug as a product?
Ian Nicholson:
And then you it's , it's like a prodrug, but the preexisting molecule and the resultant acid are novel chemical matter. And thus we can get novel IP around the precursor drug and the acid. And because of course it's an acid, it reaches out of the cell quite slowly and that gives rise to half life of roughly 15 to 25 hours which leads itself beautifully to all one steady delivery.
Fintan Walton:
Okay. So the molecule candidates can be any other candidates there exist already which have their own profile or you're generating new candidates?
Ian Nicholson:
We are doing both. We are modifying pre-existing agent and generating novel, completely novel IP around our candidates both ester and acid, and we are taking the novel chemistry which we some of which we developed ourselves and also applied Motifs-technology to that. So it's quite broadly applicable.
The importance of having a platform when running a biotech company.
Fintan Walton:
Okay. So running a biotech company these days it's important to have a platform?
Ian Nicholson:
I think, as you know in the industry, platforms come in and out of vogue in a fairly cyclical fashion. I would argue in today's environment as we sit here today, novel platform is which can give rise to innovative programs in unmet areas of therapeutic need are going to give rise to reimbursable products for the pharma industry. And that is key of course, to fill in pharmaceutical companies pipelines. So I think having a platform which is broadly applicable across therapeutic areas, which could be transformational in the context of drug discovery and drug development is very much in vogue. And as you're seeing from a number of recent deals, our deal a deal [PharmaDeals ID = 33439] with ConcertTherapeutics which is in Deuterium based drugs -- there is a quite a number, it's quite a it's quite a trend in favor of platform deals and that I think is attractive to pharma industry right now because potentially that gives rise to drugs in 2010, 2020 period which is exactly the maximum area of need the pharma company is looking to fill pipelines.
Chroma Therapeutics's deal with GSK.
Fintan Walton:
So the attraction to GSK, which is a deal [PharmaDeals ID = 33525] that you announced just recently works?
Ian Nicholson:
Yes.
Fintan Walton:
Because you have that platform, that capability to generate new molecules?
Ian Nicholson:
Yes, yes and because of the complete innovative approach we've got, this is never really been done before in such a broad setting. And we are working with GSK across four topics which weren't disclosed across four earlier stage programs, these are not clinical programs yet, of course we hope that it will be. And I think the attraction to GSK was the innovative and transformational nature of the platform.
How deal making has changed in the last 20 years.
Fintan Walton:
Okay. So we'll come back to that deal in a moment. Just one of the things obviously Ian Nicholson, you have been in the industry for many years?
Ian Nicholson:
Yes. Probably as many as you Fintan Walton.
Fintan Walton:
Indeed, indeed I remember you very well even recognized your face. But one of the those things that you did do and have done for those years is to get involved in deal making.
Ian Nicholson:
Yes.
Fintan Walton:
And i suppose one of the key questions is, has it changed has deal making changed over the last 20-years?
Ian Nicholson:
Yes, I think it has. And as you know I follow these trends quite closely. I think now in the current environment we're seeing a trend towards platform deals as we've just discussed. And we are also seeing the trend towards de-risk assets, the later stage of clinical development. It's not that many deals being done in early stage Phase I and Phase II the deal landscape has changed very much to the de-risk then in another words Phase III NDA and beyond. And so I think there is a there has been a trend to a separation of deals across the discovery development spectrum to both ends of that spectrum, but not in the middle.
Fintan Walton:
So in another words you see in forecast that there are gonna be more deals done in preclinical early stage technologies?
Ian Nicholson:
Around platforms, around platforms
Fintan Walton:
Around platforms, on specific platforms?
Ian Nicholson:
And also significant number of deals done for very late stage assets.
Fintan Walton:
But haven't we really then turned full circle, because back in the days of Celltech, we both worked there.
Ian Nicholson:
Yes.
Fintan Walton:
It was -- we were talking about platforms?
Ian Nicholson:
And we may well go full circle again.
Fintan Walton:
Indeed.
Ian Nicholson:
I mean it's a very interesting, I think to watch as you and I been involved in the industry for over 20-years it's been very interesting to see how the things cycle through.
Fintan Walton:
Right.
Ian Nicholson:
And how the trends you know do come back in vogue.
Fintan Walton:
Right.
Ian Nicholson:
The last trend, I could remember where platforms were in vogue was 1999, 2000 in the year (indiscernable) days.
Fintan Walton:
Yeah.
Ian Nicholson:
And that trend I think is generally coming back right now. So it's a it's what the almost a 10-year cycle.
The negotiating power between pharma and biotech companies.
Fintan Walton:
Yeah. But also the industry has changed because pharmaceutical industry has it's own issues, independent of the biotech industry it needs to access it has a huge appetite.
Ian Nicholson:
Yes.
Fintan Walton:
For improving it's pipelines?
Ian Nicholson:
Absolutely.
Fintan Walton:
So does that change the negotiating position of a biotech with the pharma company, has the negotiating par shifted in the last 20-years?
Ian Nicholson:
Very much so, I think -- I think we've seen it go from a buyers to a sellers market and back to a buyers market. And I think from the perspective of a biotech company, I think one should take hard, that if you really have novel assets. Novel assets that really are addressing unmet areas of clinical need in an innovative patent protective fashion that is what pharma will eventually be seeking because reimbursement is a really key issue for pharmaceutical companies going forward. There is no longer good enough to have a me to or a me better. We have to have something that's truly innovative to ensure that you are going to get reimbursement in all the major markets.
Fintan Walton:
Okay.
Ian Nicholson:
But anyway, coming back to your question if I may.
Fintan Walton:
Sure.
Ian Nicholson:
Which was really I think towards the aspects of how things have changed, I think really having very, very innovative IP protected assets is absolute critical to deal making, has been was been, it has been, is in the present and will be in the future.
Biotech funding
Fintan Walton:
Absolutely. It's a very important point. Now the other aspect of course to biotech is funding?
Ian Nicholson:
Yes.
Fintan Walton:
And you know when you were involved in the early stages of Chroma Therapeutics you successfully raised 12 rounds of finance. And of course as everybody knows in 2009 is an it's not a, as easy time, I wasn't saying it was very easy either in the past, but everybody is aware that things are little bit different. So from a funding perspective you've done -- lets go back to the deal that you've done with GSK, just announced recently, Is it necessary these days for biotech companies to consummate a fund raising together with a deal with a major pharmaceutical company not only just consummating the deal in terms of whatever the license or options are involved in that, but also making an equity state -- is that the way in which fund biotech companies have to go forward now?
Ian Nicholson:
Well I think, as you know the funding environment is another nuclear winter in biotech finances. It's a very difficult environment in which to raise financing particularly from new investors and we as a company have got some very supportive, deep pocketed, highly sophisticated investors as you know Abingworth, Nomura, Essex, Wellcome Trust, Gilde . I think those parties see us as a, as a very innovative company are willing to support us, but to bring new money in from external VC's at a price that are existing -- valuation that are existing investors would find acceptable is quite a difficult task in this environment. So what I think that the GSK deal does for us is that brings new money into the company at the price that our existing investors find acceptable. And I think also in addition to that really, truely validates the nature of our technology platform. So both those elements are important Fintan Walton, and having two-years cash which we have is a very luxurious position to be in, in comparison within the rest of the private biotech industry particularly in the UK and Europe.
Fintan Walton:
Right. And so having experience-experience that you've had over the years looking at, what are doing at Chroma Therapeutics, looking at the type of deal that you've done, how do you see our industry transforming? I mean, are we really what the relationship of, of biotech companies with pharmaceutical companies is that do we see that changing? Do we see that they must have a component to a biotech that they must have a GSK or a major pharmaceutical company coming in relatively early in the process while it's maybe a several years ago it wasn't necessary?
Ian Nicholson:
Yeah. I think again this is cyclical. I think we'll probably go through rounds of a vogue if you like in that setting. So I think at the present time, in the present financing environment having support in validation of a major pharma company is quite important to the smaller, private companies. As you know three-years ago that was not in vogue it was a go to loan strategy. And that obviously reflects the financing environment at the time. However I think for us we're delighted to have GSK on board, and in certain circumstances where you've got multiple assets and you've got a large portfolio of pre-clinical and out clinical assets you can't do everything yourselves as a 40 person company. We do need the assets and resources of a bigger plan. And so for us this deal is quite important not only in the name plate value of the deal and the validation, but also truly in enabling those assets to get into the clinic and through the clinic in a most efficient fashion.
The importance of government support for the industry.
Fintan Walton:
Right. And when we look at the, our industry and when we look at how it's developing, is it necessary for governments to give more support to the industry and you know at the moment for an example here in the UK there is announcements that there is going to be a new technology fund which will help funding of biotechnology. How important is the entry of a government sponsored fund to the development of biotechnology?
Ian Nicholson:
Well as we've been discussing here at this Leadership Summit the entry of the government with it's fairly innovative new fund, we think may stimulate the interest of the pension funds and the more institutional investors in reintegrating that confidence and interest in investing in the sector, so to that extend I think it's important. I think also government funding a basis research is critical.
Fintan Walton:
Anyway.
Ian Nicholson:
Because at the moment, you know one of the issues for our industry is the funding of early stage ventures, the pre-clinical companies, the research stage companies, which really are at the bottom-end but the important end of the food-chain. And without that innovation at the very beginning -- in other words in basic research and basic science of course the industry had no longer, has a food-chain and therefore is in, in serious difficulties. So it's in my mind government funding and innovation and supporting the MRC for example in this country, NIH in the States, is a really critical and important part of the future.
Fintan Walton:
And that's that's un-cost , that's that's once that money goes to the MRC it goes?
Ian Nicholson:
Indeed it does, but
Fintan Walton:
Largely.
Ian Nicholson:
Its uncost I think in the long-term and hopefully to the benefit of patients.
Fintan Walton:
And ultimately or hopefully some technology comes out of that which is patentable, but it's taking it into commercial?
Ian Nicholson:
Precise and provide some returns and of course to government.
Fintan Walton:
Government ultimately in the end. But just one other thing, obviously you mentioned how important is to try and get the pension funds back into the funding biotech again hopefully, but are we in a, in danger also that some of the existing funds you've described your fund your backers, quite correctly a sophisticated investor, they are sophisticate in the sense that they understand our industry, understand the biotech industry but one of the trends that is happening is a lot of these firms are moving away or are closing down the funds and moving away, are we in danger of losing part of the life blood that the industry needs, in other words a sufficient portfolio of venture capital funds to come into biotech?
Ian Nicholson:
Well, I think one of the trends we have seen is certain American funds coming over to Europe looking for innovation. And we have an our (indiscernable), we have very largely American investment fund (indiscernable) so despite the fact that some of the previously involved UK based firms are rather disappeared all as you say moved out of the sector, there are spaces to a certain extend being filled, but it's an issue for the industry. I think perhaps a very important issue for our industry is the funding of pre-clinical start ups, because as I say without those and you know the issues involved there, without those we won't get the companies of tomorrow, which effectively will then form you know the pipelines of major pharma companies going forward. And also provide the innovation to treat patients at the end of the day, because that's we actually forget. So I think it's quite important that you know we do have a viable venture community within Europe and within the UK that can fund those earlier stage ventures as well.
The next big thing to come out of Chroma Therapeutics
Fintan Walton:
What's the next big thing that's gonna come out of Chroma Therapeutics?
Ian Nicholson:
The next big thing is the commencement of our pivotal study, which starts just after the summer Fintan Walton and it's a big step for a company of our size. And in addition to that we hope to generate some preclinical candidates both within our GSK collaboration and under our own stream, which will then fuel the pipeline coming out of our platform.
Fintan Walton:
Ian Nicholson, thank you very much indeed for coming on the show. Thank you.
Ian Nicholson:
Thank you Fintan Walton. Pleasure.
Ian Nicholson
Chief Executive Officer
Ian Nicholson joined Chroma Therapeutics in September 2004. Prior to joining Chroma Therapeutics, he was Senior Vice President of Business Development for Celltech, responsible for all global licensing activities, and additionally held the position of Acting CEO, Oxford GlycoSciences following its acquisition by Celltech. Prior to this he was Commercial Director at Oxford Asymmetry and has held a variety of senior commercial positions with Lonza and Amersham. He holds a BSc (Hons) degree from University College, London and an MBA from Boston University.
Chroma Therapeutics
Chroma Therapeutics is a privately-held biotechnology company focused on the discovery and development of novel small molecule drugs based upon chromatin biology and novel cell accumulation approaches. Chroma Therapeutics is the first company to systematically assemble intellectual property in chromatin biology and has established a strong network of academic collaborators. Chroma Therapeutics aims to build substantial shareholder value through the creation of a broad and innovative product pipeline aimed at the treatment of high-prevalence cancers and inflammatory disorders.