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 Forming a pharma fund
May 2012
SHARING OPTIONS:
Announced in late March, the fund marries Index Ventures’ 15
years of experience investing in early-stage R&D efforts and the
considerable resources and experience of large pharmas GlaxoSmithKline and the
VC affiliate of the Janssen Pharmaceuticals group from Johnson & Johnson.
Representatives from the three companies will comprise a scientific advisory
board charged with investing nearly $240 million in companies seeking to
develop assets that have first-in-class or best-in-class mechanisms of action
and target areas of unmet medical need.
The unique VC/pharma partnership, intended to stimulate
promising early-stage drug programs, will primarily award funds to European
companies, but the partners also expect to extend funding opportunities to some
U.S. companies.
Since 1996, Index Ventures has invested approximately $300
million in dozens of life-science companies at seed or growth-stage levels, and
those companies have raised more than $1 billion for their efforts. Current
portfolio companies include Acutus Medical, Cellzome, Profibrix, Cyrenaic,
Funxional Therapeutics, Sonkei, Molecular Partners, Mind-NRG and Novocure.
Index Ventures has been involved in the start-up rounds of companies including
Genmab A/S, PanGenetics BV (which was later acquired by Abbott Laboratories
Inc., Aegerion Inc., Addex Pharmaceuticals Ltd., ParAllele BioScience Inc.
(which was later acquired by Affymetrix), Molecular Partners AG and ProFibrix
BV. Index Ventures has also invested in later-stage rounds of financing in
companies such as Micromet (which was recently acquired by Amgen) and Ariad
Inc.
Many molecules discovered in labs financed by Index Ventures are now part
of late-stage clinical pharmaceutical pipelines.
“Our sweet spot is investing in new modes of action and
innovative approaches to preclinical drug discovery and development,” says
Index Ventures Partner Francesco De Rubertis. “We have been very lucky over the
last 15 years, and very happy and satisfied with the returns on our
investments—but clearly, the game is becoming more and more difficult. New and
different molecules are always hard to come by. R&D is becoming more
difficult because regulatory requirements are higher. We wanted to make sure
that in the face of these increasing challenges, we could improve the
efficiency of the drug discovery engine.”
“We had a strong philosophical and intellectual alignment,”
says GSK’s Slaoui. “We strongly believe the market needs to govern the
entrepreneurial community, and that is what we are trying to encourage here in
a project-centric, arms-length-based pharma/VC interaction.”
Index Ventures will maintain full decision-making rights to
the portfolio companies, and the fund rules and procedures will follow previous
Index Ventures financings. Should GSK or J&J choose to license the rights
to a compound backed by the fund, they will have to bid as any other drugmaker
would, and will not receive special consideration, notes De Rubertis.
The partners have two different conditions for investment,
explains De Rubertis: “Either the company must have a completely new mode of
action, where a lot of biology has been explored already, or the mode of action
can be presented already, but the company must have preclinical data to point
toward some kind of differentiation, such as better efficacy,” he says. “We are
looking for great quality of science, innovative preclinical development
assets, first-in-class or best-in-class molecules and finally, a financing
strategy and business plan approach that is lean and mean and focused on one or
two assets at a time.”
While it is no secret that life-science companies are facing
tremendous financing challenges in the current economic climate, De Rubertis
says he believes the root of the problem involves issues currently hampering
R&D innovation.
“The industry has tremendous issues today with getting drugs
across Phase II or III approval lines, given that regulatory pathways are
becoming more difficult. Because of those challenges, venture-capital funding
may become more difficult in the future. This partnership hopes to address
those challenges by incorporating the wisdom and experience of large
pharmaceutical companies and financing experience, which we think will really
help out in the decision-making process for investments,” he concludes.
LONDON—GlaxoSmithKline PLC (GSK) also announced in April
that it has entered into a stock purchase agreement to acquire 10 million
shares of common stock of biopharmaceutical company Theravance Inc., at a price
of approximately $21.30 per share.
The price per share was determined based upon a 7.5-percent
premium to the volume-weighted average price per share of Theravance’s common
stock over the five-day period ending March 30, which was approximately $19.80.
The companies have worked together since November 2002, when
Theravance entered into a long-acting beta2 agonist (LABA) collaboration with
GSK to develop and commercialize a once-daily LABA product candidate, either as
a single agent or in a combination medicine, for the treatment of asthma and/or
chronic obstructive pulmonary disease (COPD). The inhaled corticosteroid (ICS)/
LABA combination, Relovair, has now completed its Phase III development, and
GSK intends to submit regulatory applications for COPD in the United States and
Europe sometime this year. For asthma, GSK also plans to submit an application
in Europe in mid-2012 and will continue discussions with the U.S. Food and Drug
Administration on the regulatory requirements for a U.S. asthma indication. The
long-acting muscarinic antagonist (LAMA)/LABA program is in Phase III
development in COPD.
In March 2004, the companies also entered into a strategic
alliance under which GSK has licensed a Bifunctional Muscarinic
Antagonist-Beta2 Agonist (MABA) for the treatment of COPD. This program is currently
in Phase II development.
The transaction is subject to certain closing conditions,
and is expected to be completed shortly after Theravance’s annual meeting in
May. Code: E051204 Back  |
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