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control the sugar composition of a glycoprotein, and by doing so, harnessing its ability to create new molecules. (Gerngross wouldn’t say when Merck started doing this, or how far along those efforts are.)
“That’s where the value proposition is. Not trying to make stuff cheaper that someone else has invented,” he says.
Once GlycoFi was sold, things were different for Gerngross personally. As a proven entrepreneur, people in biotech suddenly were asking for advice, asking for help in starting new things, asking for a little piece of his time.
Gerngross soon found his next problem to solve. Demand for biologic drug candidates remained strong. Pharma CEOs were telling Wall Street that they wanted such drugs to take up more and more of their pipelines. Through his time working with Merck, Gerngross says he saw it wasn’t easy to get ahold of a high-quality antibody discovery system in a “long-term, reliable way.” The field was crowded with startup competitors, and there wasn’t much available intellectual property after many of the early-generation antibody platform companies were acquired. But what if there were a way to streamline the process, and come up with something that was both unencumbered by existing IP, and superior?
He sifted through potential solutions with a former student, Errik Anderson. They looked at E. coli as a potential discovery tool, for instance, before returning to yeast. Gerngross obviously had experience engineering it, and his former MIT colleague, K. Dane Wittrup, was already using it to discover antibodies.
So Gerngross connected with Wittrup, pitched his vision for a new company, and enlisted the support of his former colleague. Adimab was co-founded by Gerngross, Wittrup, and Anderson in 2007. They designed, and created, a yeast-based discovery technology that essentially works by mimicking the immune system, and in doing so, can help discover a specific antibody aimed at a specific biological target in as little as six weeks—far faster than the norm of several months.
Financing was much easier this time around. Adimab has raised around $50 million since inception from many of the same investors that bet on Gerngross before.
At first, Gerngross thought the ultimate goal with Adimab would be to sell it to another pharma company. But instead, he found that these companies weren’t interested in paying top dollar to own another antibody discovery engine. They just wanted reliable, long-term access. Gerngross was thrilled. Mindful of the GlycoFi experience, he and his team quickly adjusted Adimab’s model.
This gave Adimab more opportunities to succeed. Instead of doing a couple big deals that would hopefully lead to a monster acquisition, it would first craft a series of small deals, giving pharma companies the ability to kick the tires, so to speak, by testing out the technology for a single, or even a few disease targets. Then, assuming they liked what they saw, they could buy the car, or bring the technology in-house. By amassing deals like this, Adimab would get up front fees, recurring payments, and ultimately royalty paydays should those antibodies ever lead to marketable drugs.
None of Adimab’s antibodies, of course, have yet reached that point. But after getting nibbles from a number of pharmaceutical companies—Roche, Merck, Pfizer, Gilead Sciences, and others—this year Adimab finally signed three tech transfer deals with Biogen Idec, GlaxoSmithKline, and Novo Nordisk. Though Gerngross hasn’t divulged the numbers behind these deals, he’s said that Adimab is now serving more than half of the top 20 pharmaceutical companies, and is getting business from several startups too. It’s profitable, on track for between $50 million and $100 million in revenue this year compared to about $15 to $20 million in annual costs (Gerngross declines to specify further). Its last venture financing was done at a valuation of more than $500 million.
Adimab doesn’t need to go public or get acquired to turn that paper wealth into liquid returns. It turned itself from a C-corporation into an LLC so it could distribute cash to shareholders via dividends. If any shareholders were to start itching for a sale, Adimab could just buy those shares out. The company is still 54 percent owned by its employees, Gerngross says.
“I have very little interest in selling it—and no need to sell it,” he says.
Indeed, Gerngross now defines success in more than strictly financial terms. In five to 10 years, he wants 80 percent of the antibodies in Phase III trials originally discovered by Adimab.
With Adimab now humming, Gerngross has been able to step back a bit. Though he still spends a majority of his time with the company, he says he doesn’t have to micromanage it anymore. Gerngross still teaches at Dartmouth. He loves to sail and ski. He bought a racetrack. He spends roughly a month each year traveling around remote areas in East Africa like Kenya and Uganda, interested in how other cultures live.
At the same time, he’s developed a strong bond with Dartmouth. He has no desire to live in the Boston biotech hub; he loves New Hampshire, and being able to commute to any of his offices in five minutes rather than sit in traffic. He has stayed on the Dartmouth faculty, and says he likes mentoring and helping to shape young entrepreneurs, and finds it just as rewarding as the financial gains of the business world. That drive has led him to head the tech transfer office at the college, which he’s hoping to reshape, in part, to get top entrepreneurial talent to Dartmouth—university politics be damned.
“If he succeeds in what he’s trying to get done there and it differentiates Dartmouth from other institutions, it will be a great thing for the school,” Ross says. “And it will just be because he’s tenacious as hell.”
He’s also using his influence in other ways. Adimab helps Gerngross attract new deals for his existing investor base, and drug development opportunities for entrepreneurs.
This led to Arsanis Biosciences, which is using Adimab’s discovery engine to find antibody candidates it can develop further against infectious diseases. Alector, started this past year by Gerngross’s former colleague Arnon Rosenthal (the co-founder of Rinat Neuroscience), is doing the same to make an antibody for Alzheimer’s disease. Avitide, too, comes from Gerngross’s network. It was co-founded by Adimab’s head of high-throughput manufacturing, Kevin Isett. No surprise: all three are backed by Gerngross’s longtime backers at OrbiMed and Polaris.
“The more senior you become and the more you’ve seen, you become more a catalyst of certain events,” Gerngross says. “By catalyzing or slowing down certain things you start shaping certain organizations or processes that you care about.”