Adimab is taking an uncommon approach to exploiting the value of its antibody-discovery technology. The Lebanon, NH-based biotech startup has no plans to ever develop its own drugs—CEO Tillman Gerngross says he thinks Adimab can become successful with income from drug-discovery and licensing deals alone.
That is the level of confidence that Gerngross apparently has in Adimab’s proprietary method for significantly streamlining and expediting how antibody drugs are discovered. Investors Polaris Venture Partners, SV Life Sciences, Borealis Ventures, and OrbiMed Advisors have bet millions that the confidence is well-founded. Adimab closed its third round of financing late last year, but it hasn’t disclosed the amount. When I visited the company this week, Gerngross told me that sometime around the end of March he expects to disclose a list of discovery deals his firm has landed.
A lot of attention is paid to how antibody drugs are discovered, as such medications generate tens of billions of dollars in annual sales. South San Francisco-based Genentech (NASDAQ:DNA), for one, reported revenue of about $4.5 billion in 2007 on U.S. sales of its top two antibody drugs, the cancer treatment bevacizumab (Avastin) and rituximab (Rituxan), which is approved for treating lymphoma and rheumatoid arthritis. However, companies in pursuit of new antibody drugs must often pay millions of dollars to multiple firms—such as Cambridge, MA-based biotech firm Dyax (NASDAQ:DYAX)—to license antibody-discovery technologies.
Adimab wants to provide one-stop shopping for these firms. The startup has a yeast-based discovery technology that mimics the human immune system and doesn’t require the use of mice or Dyax’s widely used “phage display” method to identify antibodies with the potential to treat diseases.
Gerngross says the firm’s synthetic immune system consists of yeast cells that are genetically engineered to produce some 10 billion different human antibodies. Those antibodies are attached to the surface of the cells that produce them. Next, the firm adds a potential drug target—a protein from breast cancer cells, say—that has been tagged with florescent dye. The antibodies that bind to those tagged target proteins are then identified as potential treatments for the cancer. The yeast cells that made those particular antibodies are then collected to make more of the antibodies for further testing.
The entire process takes as few as six weeks, Gerngross says, compared with the several months it can take other methods to isolate such antibodies. “It affords you speed that nobody can even get close to,” he says.
Gerngross—whose other jobs are professor of engineering at nearby Dartmouth College in Hanover, NH and venture partner at SV Life Sciences—declined to name names of big pharma firms in talks with Adimab. He says that his firm is performing discovery work for the firms as a service to demonstrate the value of the technology. Later plans include licensing the technology to select companies for their own use.
Adimab’s strategy differs from that of other biotechs with new drug-discovery technologies, which often raise capital and gain fees through licensing deals to fund internal efforts to commercialize their own drugs. That strategy requires firms to raise more money than Adimab will need from its investors, says Gerngross, who takes great pride in efficient use of capital. (There’s a $150,000 cap on all salaries at Adimab, which makes up for that low pay ceiling by awarding workers with more company stock, he says.)
Gerngross’s track record on the capital-efficiency front may speak for itself. He says the last biotech startup he co-founded, Lebanon-based GlycoFi, raised a total of $32 million to develop its yeast-based technology for discovering protein drugs. Then Whitehouse Station, NJ-based Merck bought GlycoFi for $400 million, providing terrific returns to its investors such as Polaris, SV Life Sciences, and Borealis—all three of which are backing Adimab. Adimab’s other scientific cofounder, K. Dane Wittrup, a chemical engineering professor at MIT, co-founded a biotech firm called Biodisplay that was sold to healthcare giant Abbott Laboratories in 2001.
“Tillman is a brilliant guy and I describe him as a force of nature,” says Terry McGuire, managing general partner at Waltham, MA-based Polaris and a director at Adimab. “He’s a very savvy academic entrepreneur, so when you put that all together [Polaris’s investment in Adimab] was absolutely a bet worth making.”
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