Anaphore Snags $110M Deal With Mitsubishi Tanabe to Make Drugs for Immune Disorders

12/13/10Follow @xconomy

Anaphore has found a new corporate benefactor to help create a new generation of more effective biotech drugs.

The San Diego-based biotech company is announcing today it has formed a partnership with Osaka, Japan-based Mitsubishi Tanabe Pharma to develop new protein drugs for autoimmune disorders. Anaphore will get $5 million in upfront cash, plus research support, another $110 million in potential milestone payments, and royalties on sales if one of the Anaphore drug programs goes on to become marketed product. Similar terms could kick in for Anaphore if Tanabe picks two more of Anaphore programs. The money will provide access to Anaphore’s technology, which creates specific protein molecules which are supposed to bind more thoroughly with targets on cells than traditional antibodies.

This is the first publicly announced partnership for Anaphore, although the company does have one other undisclosed collaboration with a biotech company, CEO Kathy Bowdish says. The Tanabe deal is an important validating step for the startup, which was founded in December 2007 and has since raised a total of $38 million in venture capital from 5AM Ventures, Versant Ventures, Apposite Capital, GlaxoSmithKline’s SR One venture group, Merck Serono, and Aravis Venture Associates. The investors’ bet is that Anaphore can create genetically engineered protein drugs with greater capability to bind with targets than today’s antibodies, which are lean and mean enough to penetrate inside bulky tissues, and which are equally good at blocking a biological pathway, or activating it.

“This has been an exciting opportunity, in which I’m trying to take everything I had learned over 10 years with antibodies, and thinking about how to improve on that,” says Bowdish. “We truly view this partnership as very validating.”

Kathy Bowdish

Kathy Bowdish

Quite a few companies have been sprouting up and raising cash in the last couple years with similar notions of developing “bio-superiors” or “bio-betters.” Cambridge, MA-based Eleven Biotherapeutics, Seattle-based Allozyne, San Diego-based Ambrx, and South San Francisco-based Sutro Biopharma are all examples could be filed under that header.

Anaphore’s work is still at a very early stage, and it isn’t saying much publicly about its strategy. The company has tested its protein drug candidates in the lab dish, and has seen evidence of activity there against important targets that appear on cancer and inflammatory disease cells, Bowdish says. Mitsubishi Tanabe and Anaphore aren’t disclosing which target for autoimmune disease they are pursuing first, and Bowdish didn’t say when she hopes to move that program ahead into clinical trials. She did say that part of Anaphore’s work concentrates on making “bi-specific” protein drugs, which are specifically engineered to bind with not just one target of interest, but two distinct targets simultaneously.

Since we haven’t covered Anaphore in depth before, I asked Bowdish to explain a little bit of the background. She has a long history in San Diego biotech as the co-founder, CEO and chief scientist at Prolifaron, an antibody drug spinoff from The Scripps Research Institute that was acquired by New Haven, CT-based Alexion Pharmaceuticals (NASDAQ: ALXN). After selling the company for $41 million in 2000, Bowdish stayed on as a senior vice president with Alexion’s San Diego operations for about six years. When she left that job, she did some scouting for 5AM Ventures for new opportunities. That’s where she found assets from a company in Denmark called Borean Pharma, which provided key technology for forming Anaphore.

“I really liked the platform,” Bowdish says. “Starting with my background in antibodies, and knowing the field well, I recognized that antibodies were a quantum leap in treatment of disease, and that this could address limitations with current biologics.”

Without getting too deep into the science, here’s the basic idea. Anaphore’s technology enables it to genetically engineer proteins that have “trivalent” properties. That means they can bind fully with three different domains on a cellular target in close proximity, Bowdish says. Traditional Y-shaped antibodies, by contrast, often only bind with two domains on a cellular target, she says.

“Because of the structure of antibodies, there’s a limit to their ability to fully engage targets,” Bowdish says.

The Anaphore drug candidates, which it calls “Atrimers,” are also about half the size of traditional antibodies. Scientists hope that will essentially make the new drugs more nimble at penetrating deep into bulky tissues, like tumors, which can be beyond the reach of traditional antibodies.

It didn’t take long for Anaphore to convince Mitsubishi Tanabe to get into this game. Bowdish didn’t have any pre-existing relationship with the company, but she saw opportunity back in January when the company said it was closing down the part of its San Diego research center that worked on traditional small-molecule chemical drugs. While the news of the day lamented the loss of 35 local jobs, Bowdish noticed that Tanabe expressed interest in transforming its local R&D center into a center of biologic drug development, and that it wanted to talk to local partners for help.

So Bowdish introduced herself to Masaki Yamade, the CEO of Tanabe Research Labs in San Diego, and told him about Anaphore’s work. Less than a year later, a deal was struck. Anaphore, which has its offices on the Torrey Pines Mesa next door to the Sanford-Burnham Medical Research Institute, now plans to work closely with scientific colleagues from Tanabe who are just a few minutes away in the La Jolla Towne Center Court area, not far from Illumina and Amylin Pharmaceuticals.

It became clear pretty quickly the interest was mutual. The first meeting was back in April, Bowdish recalls. Going from a cold call to an R&D partnership in eight months actually does qualify as quick in the pharma business.

“This was quick. Both sides were very engaged in the discussions,” Bowdish says. “The speed with which we were able to do this shows the excitement around the opportunity.”

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