Tesaro: Former MedImmune CEO’s Firm Writes Check, Cancer Drug Vets Build Pipeline

6/28/10

Tumors are kicking our butt in the war on cancer. What’s more, big drugmakers are cutting their budgets at the expense of some cancer treatments under development. But now there’s Tesaro, a drug development outfit that formed this spring to buy some of those promising therapies for cancer in the early stages of development and then work to bring them to the market.

Waltham, MA-based Tesaro jumped onto the cancer drug scene in late May, when it revealed that had raised $20 million in a Series A round of funding from the company’s founders and the venture firm New Enterprise Associates (NEA). The company’s big-named backer is NEA general partner David Mott, the former chief executive of Gaithersburg, MD-based MedImmune, which he sold to the drug giant AstraZeneca in 2007 for a $15.6 billion.

Tesaro doesn’t have technology of its own, like many biotech startups in Boston that are hatched in the labs of renowned research institutions here. Rather, Tesaro plans to acquire drugs for cancer patients from other companies and spend its time and money to do the necessary clinical trials to prove they are safe and effective. So Tesaro won’t have to invest big bucks on the earliest steps of drug discovery. The drugs it does acquire are expected to be ready to test in early- or mid-stage clinical trials, giving the firm a shot at having a marketable product before a typical biotech startup that begins from with raw science.

Tesaro expects to have its pick of plenty of cancer drug inventories because of several trends in its industry, company officials say. For instance, there’s been a string of mega mergers in recent years—including the Pfizer/Wyeth, Merck/Schering-Plough, and Roche/Genentech combos. As these giants combine, they are expected to cut costs and shed drugs from their development pipelines. Also, even small biotechs are expected to have molecules on the block because financial constraints are forcing them to focus their resources on fewer drugs, leaving others without resources to develop.

Mott, who built MedImmune into one of the largest biotechs in the world, says that the current … Next Page »

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