Biotech to Big Pharma
Personal Experience
Heather Davis
September 27, 2011
Ottawa, Canada
1
Coley’s founding technology:
CpG oligonucleotides TLR9 agonists
 Initial discovery was finding the molecular pattern in
bacteria and DNA viruses that turns on the immune
system shortly after infection
 Specific DNA sequence known as “CpG motifs”
 Activate through Toll-like receptor 9 found on certain
immune cells
 Coley discovered and developed synthetic CpG drugs
 Platform technology with wide potential applications
 Adjuvants for vaccines
• Made current vaccines work better – can use lower
doses (antigen sparing important during pandemic)
• Allowed development of new types of therapeutic
vaccines
 Cancer immunotherapy
 Treatment for asthma and allergy
2
Coley’s Technologies
Original technology
Licensed from founders’
academic institutions
CpG
TLR9 AGONISTS
 Cancers
– Solid
– Hematologic
 Asthma & Allergy
 Vaccine Adjuvant
New technology
Developed in-house
ANTAGONISTS
TLR7, 8, 9
 Autoimmune and
Inflammatory
Disorders
– Lupus
– RA
Licensed from 3M after
much of original
technology licensed out
RNA AGONISTS
SMALL MOLECULES
TLR7, TLR8
 Cancers
 Infectious
Diseases
Coley’s TLR Therapeutics™ Platform Progression
3
Coley’s Timeline
Co-founded by Art Krieg (U Iowa), Heather Davis (U Ottawa / OHRI) and Joachim Schorr (Qiagen)
• Coley incorporated (1997 USA, 2001 Canada)
• Incubated in Krieg & Davis academic labs until 2003
PRE-CLINICAL
• CpG as vaccine adjuvant
• Oncology immune therapy & therapeutic vaccines
• Autoimmunity
CLINICAL
• 1st three CpG clinical (vaccine) studies run from Ottawa
LICENSING DEAL
• Cancer immune therapy clinical trials
• Hepatitis C immune therapy
• Lupus/RA immune therapy
Coley
acquired by
Pfizer
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
4
4
Licensing Deals & Outcomes
PARTNER
GSK
GSK
Novartis
Merck
Other
Sanofi aventis
Pfizer
Indication
Total Deal
Milestones Received
by 2007
ID Vaccines
$62 M activity since
Took
to Phase 1 – no clinical
Cancer
Vaccines
In Phase
3 testing
$44 M
Vaccines
$35 M license
Took
to Phase 1 – cancelled
Vaccines
No
clinical testing
$33 M
$11.5 M
$9 M
$1.8 M
$4 M
M 1, ongoing activities
$21 M
Other
vaccines
Emergent
– completed $35
Phase
Asthma,
Took toallergic
Phase 1 – cancelled
$265 Mlicense
rhinitis
Cancer
Phasetherapy
3 trial failed
$515 M
$14 M
$65 M
5
How to succeed in biotech
 Founder characteristics
 Secure financing
 Recruit senior management
 Valuable technology, protected by IP
 Luck & timing
6
Founder characteristics
 Hard working, driven
 Adaptable
 Able to wear many hats
 Successful transition from academia to corporate world
requires thinking differently
 Hard working
7
Securing financing
 Coley had 1 year funding from founder
 Initial venture funding was Swiss / German
investors who had previously invested in corporate
founder
 Subsequent rounds introduced US investors
 No Canadian VC’s ever participated
 Too late
 Expected too much control for their investment
8
Recruit senior management
 Founders rarely make good senior managers
 Coley benefitted for 3 years by using senior management of
another company
 Coley later hired own management team
 Huge advantage having head office in Boston area
• Candidates with senior drug development experience are relatively rare in Canad
 Critical hires since each represents a single point of failure
 Drug development complex and only learned through experience
• Senior executives coming from Big Pharma sometimes couldn’t scale
down to biotech appropriate activities
9
Valuable technology
 Technology must actually work
 Positive clinical data trumps all
 Selling technology on mouse data possible, but typically brings low
value or back-loaded deals
 Platform technologies have greater chance to succeed
 Need to know when to let go
 Unrealistic for biotech company to expect to develop pharmaceutical
product to market
 IP protection critical
 Needs to be broad in scope and geography
 IP protection costs escalate rapidly after provisional filing – difficult for
academic unit to sustain until alternate financing secured
10
Wild cards
Luck
Timing
11