Presage Snags $13M from Celgene to Pick Winning Cancer Drug Combos
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technologies to enhance its understanding of how tumors respond to certain drug combinations. One is supposed to enable it to assess how an experimental drug might perform against tumors with repeat dosing, or in a staggered dosing sequence with chemo or other agents, that allows them to prime a tumor with one drug and whack it later with another, Caffo says.
Presage, which currently has 21 employees, plans to use the new shot of cash from Celgene to double in size over the course of the agreement, Caffo says. The plan is to add new capabilities in imaging analysis of the data it gets from its three different technologies, and to make its underlying technologies easier to use for more than a handful of specialized technicians.
Celgene is clearly hopeful the new partnership will help it get more productive in early R&D, where companies often have to make expensive, long-term investments on thin bodies of evidence.
“Drug development is currently challenged by heavy reliance on in vitro test systems and animal xenografts of little relevance to individual patients,” said Tom Daniel, Celgene’s president of research and early development, in a statement. “The Presage platform addresses this challenge, permitting rapid assessment of drug candidates and combinations in relevant models, with potential to base critical drug development decisions on in vivo response data.”
Besides the scientific angle, Celgene was willing to consider creative ideas on the structure of the business deal, Presage’s Caffo says.
Presage had previously raised a total of $7.7 million from a network of angel investors, and with no venture capital or other institutional backing, it has somewhat limited fundraising capability. So Celgene provided an $8 million portion of its upfront payment in the form of an equity investment in Presage, while the remaining $5 million is allocated for research support.
Caffo, like many other startup executives, raved about Celgene’s flexibility in structuring a partnership for mutual benefit. Celgene has struck a number of high-profile deals with companies like Cambridge, MA-based Agios Pharmaceuticals, Cambridge, MA-based Epizyme, and Seattle-based VentiRx Pharmaceuticals, which have provided significant support to the small company, while allowing it to stay autonomous and nimble while it develops its technology. Even though Celgene has invested more than half of the $15.7 million that has gone into Presage so far, the big company was willing to accept less than a controlling ownership stake, Caffo says. Celgene isn’t getting a seat on Presage’s board, or an observer seat, he adds. What the bigger company did get was the opportunity to make an offer to acquire Presage if it entertains a bid from another company, Caffo says.
“These guys have a deserved reputation as real innovators,” Caffo says. “They were willing to structure something very creative. They were really willing to work with us to do an equity investment that enables us to build up the platform.”
If things break right in the Celgene deal, it could provide resources for Presage to grow into a more diversified company. Olson, in this 2009 Xconomy feature, talked about the possibility of physicians using the Presage tool to prescribe the optimal mix of drugs for an individual patient’s tumor, after seeing how various drugs perform against a surgically removed tumor sample. Presage shied away from such a diagnostic strategy in its early days, preferring to help drug companies, because the FDA approval pathway appeared too uncertain and expensive, Caffo says. But Presage has recently revived the idea of going down the diagnostic pathway, and recently began a clinical trial of its tool with support from a grant provided by the National Cancer Institute.