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Zymeworks Hits Antibody Drug Milestone For Merck, Raises $11M

Xconomy Seattle — 

One year ago, Zymeworks was a little company that hardly anybody in the U.S. biotech or pharmaceutical industry had ever heard of. Then it formed a collaboration worth as much as $187 million with Merck (NYSE: MRK). Suddenly, it seemed to Zymeworks CEO Ali Tehrani like everybody in the pharma industry wanted to hear about what his company was doing.

“Last year was a ‘hello, world’ moment for us,” Tehrani says. “This year, watch out for us.”

Zymeworksdoes indeed have something to talk about to keep the story moving forward. The company is announcing today that it has achieved one of the technical milestones spelled out in its partnership with Merck, which triggers an undisclosed cash payment that Tehrani says is “meaningful” to the small company. Besides that milestone, the 40-employee operation is announcing it has raised another $11 million from Advanced Biotechnologies Venture Fund, a group of angel investors from the U.S., Europe, and Canada. The company has now raised a total of about $30 million since its founding in 2003.

Ali Tehrani, co-founder and CEO of Zymeworks

The big idea Zymeworks is pursuing is the development of “bispecific” antibody drugs that can be designed to hit more than one molecular target on diseased cells. The first generation of targeted antibody drugs—products like Genentech’s trastuzumab (Herceptin) and Abbott Laboratories’ adalimumab (Humira)—have been genetically engineered as Y-shaped proteins that are made to zero in on one specific target on diseased cells while largely sparing healthy cells. But as researchers have learned more about the biology in recent years, there has been increasing awareness of the potential of bispecific drugs that can specifically bind with two or more molecular targets.

Zymeworks certainly isn’t the only company working on new and improved antibody drugs. Tehrani likes to give a slide presentation that lists 39 different competitors, including big guys like Amgen, Genentech and Pfizer, and smaller companies like Genmab, and Xencor. When looking at that landscape, Zymeworks is aspiring to stake out a position as the one with the best technology for making a wide variety of protein drugs, including bispecifics, that cost about the same to manufacture as conventional antibodies, can be scaled up to commercial volumes, have similar properties for absorption and distribution through the body, and don’t trigger a negative immune system reaction against the drugs.

The company isn’t saying specifically what technical milestone it reached through its Merck deal, but Tehrani did describe Zymeworks’ progress in general. The company has done experiments that suggest it can do all the things listed above, and that work has been validated as well by Merck scientists. Neither Merck nor Zymeworks will disclose what molecular targets it is making drugs against, what diseases they have in mind, or how far along the work has advanced in R&D. But Tehrani did note that while a lot of research collaborations between large and small companies fizzle out in their first year, Zymeworks is happy to say its partnership is alive and advancing ahead.

“Merck has been a phenomenal partner, they have been extremely fair, extremely dedicated and diligent in doing what they promised they were going to do,” Tehrani says.

Important as the Merck deal has been for Zymeworks, Tehrani stresses that he doesn’t want to be pigeonholed, or for people to think he’s merely running a contract shop for the Whitehouse Station, NJ-based pharma giant. The alliance is structured as a non-exclusive deal, so that Zymeworks owns the protein engineering technology, and Merck has the right to use it to develop a certain number of drugs against a certain number of targets. As part of the $11 million financing, Zymeworks will invest in its own internal cancer drug candidate that it hopes to drive into clinical trials by late 2014, Tehrani says. And the company expects to announce “more Merck-type deals” that provide access to the technology for specific drug development uses, but with more lucrative financial terms for Zymeworks because of the progress the technology has made, he says.

“The Merck deal wasn’t a fluke or a one-off,” Tehrani says. “If you have a best-in-class technology, others should want to come to the table.” He adds that because of the value placed on trusting relationships in biotech, it’s possible to get a single partnership on a relationship and chalk it up to luck. Getting a second partnership provides further validation. Getting a third, he says, should prove that “in terms of structure guided protein engineering, we are one of the best.”

Without going too deep into the science, here’s the basic gist of what Zymeworks is attempting to do. Most companies seeking to make bispecific antibodies start with the DNA sequence for making a conventional Y-shaped antibody that can hit one target, and use a chemical linker to attach another molecular binder. That technique is what’s known as a homodimeric approach, Tehrani says.

Zymeworks, by contrast, is seeking to make engineered antibodies a different way, through a heterodimeric process. This technique essentially creates a single Y-shaped antibody in which each half can bind with a distinct molecular target, without the need to attach any other molecule. That means the heterodimeric bispecifics should behave in the body more like conventional antibodies, and should be easy to scale up and manufacture for similar cost, Tehrani says. A homodimeric antibody, he says, is analogous to having a third arm added to a person’s back, which might be useful for grabbing things, but which also would throw off a person’s gait, and make it harder to sleep. A heterodimeric antibody would be a little more like keeping both arms intact, but engineering in some new skill for both the left and right hands.

Since this is still science in the early stages, plenty is still unknown and plenty can go wrong. Tehrani acknowledges all the risk, but he was also brimming with optimism when we met yesterday morning in Seattle, discussing how far Zymeworks has come in the past year.

“We have the IP (intellectual property), we have a pharmaceutical collaboration, we have money,” Tehrani says. “We have the main ingredients to move forward.”

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  • Jerry Jeff

    Out of curiosity, where do bispecific drugs stand right now in terms of commercialization? Any approved yet, or still in clinical trials?

  • Guest

    Deus Ex

  • Anonymous Coward

    The real story here is that they can make much more money by being biospecific – it will be difficult for competitors to make a generic drug like theirs, so higher margins will be retained – something one of their company spokespersons boasted about. Good to know that profit is more important than saving as many lives as possible.