The Antibody Society

the official website of the antibody society

An international non-profit supporting antibody-related research and development.

Funding the Development of Antibody Innovations: Part 4: Exit Strategies for Investors in Antibodies

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By Tom Burt (Partner, Sofinnova Partners) & Nick Hutchinson (BSG Lead, Mammalian Cell Culture, FUJIFILM Diosynth Biotechnologies)

Start-up antibody companies need substantial amounts of capital to fund the late-stage clinical development of lead candidates and grow their clinical pipelines. In our 3rd post, we described the role of Venture Capitalists (VCs) in funding the early-phase development of antibody therapeutics and introduced the concept of crossover investors (1). In this, our final post in the series, we look at the final stage of the financing cycle and describe how early investors may seek to exit with a return on their investment.

According to Tom Burt of Sofinnova Partners, the emergence of crossover investors in the past 5 years has accelerated the path to the public markets for many ‘early-stage’ biotech companies. “Crossover investors’ have flexible criteria around the clinical stage of the company’s lead program that has led to their participation in earlier private rounds such as Series A/ B funding. Furthermore, it has resulted to the counter-intuitive situation where, on average, preclinical companies can command higher pre-IPO valuations than their later-stage peers (2; Figure). In these cases, it is because the crossover candidates encompass highly differentiated or novel modalities, including antibody-drug conjugates,  bispecific and multi-specific antibodies,” he says.

According to Tom, a start-up can continue to raise capital from the private markets in later-stage financings such as Series C and onwards despite the absence of a crossover financing round. “It may choose to do this for the following reasons: 1) crossover investors don’t believe the company can command the minimally accepted IPO valuation required to go public in the US of over c.$300m; 2) existing investors may believe they can command a higher IPO valuation if they wait, pursue an additional financing round and reach a milestone event such as a clinical trial readout, or 3) existing investors feel there is a high chance the company may strike a value-driving partnership or be acquired in the near-term,” he says.

EpimAb’s three rounds of funding

EpimAb is one such company that progressed to Series C funding. It is a start-up antibody company that initially raised $25 million in a Series A round and put it to use to develop its proprietary Fabs-In-Tandem Immunoglobulin technology platform. The platform generates antibody-like bispecific molecules designed to be more potent, less immunogenic and easier to manufacture than those produced by other bispecific antibody technologies. It was able to build a pipeline of candidates and progress the first into clinical trials with the cash (3). In 2019, the company raised $74 million in Series B to build out the pipeline further, but also to progress its lead candidate, EMB-01 (targeting EGFR- and cMET) into Phase 2 clinical trials for oncology indications (4).

This year the company announced it had raised $120 million in Series C funding to further progress the clinical development of EMB-01, but also to fund the clinical trials for two other candidates. EMB-02 targets checkpoint proteins PD-1 and LAG-3, while EMB-06 is a T-cell-engaging bispecific that targets CD3 and BCMA. The company sees the three programs as pilot projects in three major areas of bispecific antibody development, namely, targeted oncology, dual checkpoint inhibition and T-cell engagement. It has licensed its technology to other companies which has provided income and helped validate the company ahead of a final round of private investment and subsequent IPO (5).

Tom says, “Generally, for investors in companies that pursue later private financings, an acquisition is always a preferable exit route over IPO. By this point, Series A investors may have been shareholders in the company for over five years and an acquisition represents a complete exit. If they attempt to exit through an IPO, they are restricted on selling down their shares immediately as these are locked up for at least 6 months following IPO, and even then can only be sold in a co-ordinated way that will not impact the share price.”

He continues “Assuming that EpimAb is not acquired before its current capital is exhausted, it may decide to pursue an IPO. The main attractions of an IPO are that: 1) public capital markets are much larger than private markets and can provide greater quantums of capital needed to pursue late-stage clinical development; and 2) it provides an exit route of sorts for earlier investors.“

Over the past few years NASDAQ has become the venue of choice for global biotech companies seeking to IPO. This is not to disparage European exchanges such as AiM or LSE, but generally the US market has much deeper pools of capital, comprising many more specialist public buyside investors who focus on public biotech stocks. Arguably, it makes little difference to the company where its shares are listed, since R&D operations can largely continue as before. Beyond this continuity though, the move to public status represents a step-change in how the company is owned, managed and regulated that is significantly different to its prior existence as a private company.

Conclusions

Innovations derived from the discovery and development of antibodies, especially therapeutic antibodies, come from scientists with creative minds, but large amounts of capital are needed to bring ideas to fruition. Many scientists will forge careers in companies that are not yet generating revenues, but are being funded by investors. Some scientists may opt to move out of research and work in the sector supplying inventors with the advice and funding required to progress their innovations. These opportunities include those in technology transfer, consultancies, analysts, and, of course, VCs themselves.

Ultimately, discoveries in antibody research and development will not benefit society, including patients suffering from serious diseases, unless scientists with passion take the bold step to commercialize their ideas by launching their own business and raising money to continue their development. The Antibody Society comprises a community with members that have done just that. Furthermore, our community has a huge amount of expertise that can help budding entrepreneurs with support ranging from mentoring, intellectual property advice through to recruiting management teams. We hope that this series of posts will kick-start introductions and discussions among Society members that will help establish the next generation of antibody companies.

(1)    Burt T. & Hutchinson N. (2021). Funding the Development of Antibody Innovations. Part 3: Crossover Investors. 
(2)    Cowen Healthcare (2021) Life Science Market Update March 2021.
(3)    GEN (2017) EpimAb Raises $25M in Series A to Progress Bispecific Antibodies into Phase 1. Genetic Engineering News. April 25, 2017.
(4)    Al Idrus, A. EpimAb bags $74M to push EGFR/cMET bispecific, build out pipeline. Fierce Biotech. June 5, 2019.
(5)    Al Idrus, A. (2021) EpimAb reels in $120M to propel 3 clinical-stage bispecifics, including dual checkpoint inhibitor. Fierce Biotech. March 22, 2021.

Aduhelm (aducanumab) approved for the treatment of Alzheimer’s disease.

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On June 7, 2021, the U.S. Food and Drug Administration approved Aduhelm (aducanumab) for the treatment of Alzheimer’s disease. Developed by Biogen, aducanumab is a human IgG1 antibody that targets anti-amyloid b. Biogen licensed the worldwide rights to aducanumab from Neurimmune in 2007, and has collaborated with Eisai on the global development and commercialization of aducanumab since 2017.

The late-stage development program for Aduhelm consisted of two Phase 3 clinical trials. One study met the primary endpoint, showing reduction in clinical decline. The second trial did not meet the primary endpoint.  In all studies in which it was evaluated, Aduhelm reduced the level of amyloid plaques in the brain in a dose- and time-dependent fashion.  The reduction in amyloid  plaque is considered a surrogate for a reduction in clinical decline. Aduhelm was approved using FDA’s accelerated approval pathway, which can be based on the drug’s effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit to patients. A post-approval trial to verify that the drug provides the expected clinical benefit is required.

Need help keeping up to date on US and EU approvals?

The Antibody Society maintains a comprehensive table of approved monoclonal antibody therapeutics and those in regulatory review in the EU or US. The table, which is located in the Web Resources section of the Society’s website, can be downloaded in Excel format.

Learn about ImmunoPrecise Antibodies’ efforts to stay ahead of the virus on June 17!

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Join us on Thursday June 17, 8am PT/ 11am ET / 5pm CET for

 

 

Staying ahead of the virus: From a multispecies discovery strategy to highly efficacious, clinically suitable multi-antibody cocktails targeting SARS-CoV-2.

featuring:

Ilse Roodink, PhD, Scientific Director, ImmunoPrecise Antibodies Europe and
Debby Kruijsen, PhD, General Manager, ImmunoPrecise Antibodies Europe

Whereas vaccines significantly contribute to halting transmission of SARS-CoV-2, they are not universally effective. Therapeutic antibodies can fill this gap to efficiently combat SARS-CoV-2. Obviously, long-lasting efficacy of anti-viral approaches heavily depends on the ability to protect against virus variants. As a multi-targeting strategy reduces the risk of mutagenic escape, we have isolated a diversified pool of anti-spike protein antibodies by leveraging our expertise to generate antibody libraries across multiple discovery platforms in different species, to eventually formulate a sensible therapeutic cocktail. A broad range of in vitro characterizations was applied to gain early insight into the epitope landscape and functional characteristics as well as developability profiles. This comprehensive, high-throughput characterization of the obtained lead candidate pool guided the rational combination of high value antibodies into multi-membered cocktails that unlock synergistic effects, significantly boosting neutralization potency in vitro.

To accelerate further clinical development of our prioritized antibody cocktails, 2 individual components were subjected to in silico modeling-guided light molecular optimization to minimize liabilities, while in parallel, in vivo efficacy evaluation in a hamster challenge model validated efficient prevention and treatment of SARS-CoV-2 infection following administration of our prioritized antibody cocktails. Although we anticipate that a multi-targeting strategy is the best solution to reduce mutagenic risk escape, we continuously analyze binding of the antibodies of our lead pool for reactivity towards emerging SARS-CoV-2 variants empirically. To date, we screened our prioritized antibody cocktails towards spike protein of the S. African (B.1.351 lineage), Brazilian (P.1 lineage), UK (B.1.1.7 lineage), New York (B.1.526 lineage) and Californian (B.1.429 lineage) strains and confirmed retained binding. Our pandemic preparedness is further strengthened by the readily accessible, diverse pool of antibodies that we generated, which provides enormous possibilities for plug-and-play cocktails to address future SARS-CoV-2 variants.

Click here to register for this free event!

Funding the Development of Antibody Innovations: Part 3: Crossover Investors

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By Tom Burt (Partner, Sofinnova Partners) & Nick Hutchinson (BSG Lead, Mammalian Cell Culture, FUJIFILM Diosynth Biotechnologies)

The development of antibody therapeutics requires large amounts of cash to sustain nascent companies while they demonstrate the safety and efficacy of their products in clinical trials. It is estimated that it takes over a billion dollars to bring an antibody therapeutic to market. In our last post (1) we described how biotech firms use pre-seed and seed funding to get their ideas off the ground, but following these, they typically rely on VCs for their next rounds of finance. The first round of VC funding or Series A funding can run into tens of millions of dollars.

Ori Biotech, a company developing a manufacturing platform for cell and gene therapies, raised $30 million of additional funds from a group of VCs, having initially raised $10 million in seed funding. The team believe the Series A funding is sufficient to develop a minimum viable product, the earliest version of the technology that can be released to the first customers for them to provide feedback and allow subsequent improvement cycles.

In an interview published in March 2021, Ori Biotech CEO, Jason Foster, advised start-up companies seeking Series A investment to start by developing a comprehensive understanding of the market for the technology and how to pitch effectively to potential investors. Secondly, he recommended firms target the right investors, as different investors specialize in different sectors and investment stages. Finally, he emphasized that fundraising is a full-time job, so companies should ensure they have sufficient support and time allocated to this critical activity (2).

Series B Venture Capital funding

AgomAb, is a Belgium start-up that is working on regenerative pathway modulators in inflammatory, metabolic and fibrotic diseases. It has raised two rounds of VC funding. Scientists at the company have drawn upon research from the 1990s that suggested hepatocyte growth factor (HGF) and the HGF-MET pathway might have regenerative potential. Founded in 2017, the company raised $25 million in 2019 in a Series A funding round, which it used to perform research on a set of full and partial MET agonists.  These had been discovered through a partnership with argenx, which gave AgomAb access to the SIMPLE antibodyTM technology platform that raises antibodies with variable regions derived from the immune systems of ‘outbred’ llamas.

AgomAb’s Series A funding allowed it to progress its lead antibody candidate, AGMB-101, into Investigational New Drug-enabling toxicology studies, but the company needed additional funding to enter the clinic and so raised a further $74 million in Series B funding. Significantly, AgomAb considers that AGMB-101 could be efficacious in a range of disorders and represent a pipeline-in-a-product; however, it is also seeking to expand its pipeline beyond this lead candidate (3).

So, what’s the difference between Series A and Series B funding? Tom Burt of Sofinnova Partners points out, “The AgomAb example highlights that the amount of capital raised in Series B is larger, which in this case this is helpful because of the high costs of clinical development activities, and that the scope of what the business must achieve has evolved. In many instances, the two rounds of funding might seem similar and represent a continuum, with the Series B round being led by the same Series A investors. Redmile and Cormorant, two well-known US-based crossover funds, led this funding round.”

“Crossover investors can be considered as VCs that invest in promising companies that have the near-term potential to list their shares on a stock exchange in a financing round known as an Initial Public Offering [IPO]. They are a relatively new addition to the venture capital continuum. While a crossover investor will still need to be convinced of the potential in the company’s pipeline, they also have a focus on the public markets,” he says.

Cross-over investors can be more flexible around the clinical stage of development and can finance preclinical to Phase 3 clinical-stage companies if they believe that sufficient appetite exists amongst public market investors for the IPO candidate. Typically, the crossover investor[s] will seek to raise a significant amount of funds in a Series B [and sometimes Series A round] with the committed intention of supporting any IPO round alongside traditional institutional investors.

In our final post of this 4-part series, we will look at the final stages of the financing cycle, including how crossover investing has altered valuations of early-stage biotech companies. We’ll examine the case of EpiMab and discuss how investors in  a company like this might look to exit and generate a return on their investments.

We hope you’ll join us next week for the final post in this series, Exit Strategies for Investors in Antibodies.

(1)    Burt T. & Hutchinson N. (2021). Funding the Development of Antibody Innovations. Part 2: Business Angels and Venture Capitalists.

(2)    Finerva (2021). Ori Biotech – Fundraising & Growth. March 12, 2021.

(3)    Taylor, P. T. (2021) AgromAb raises $74M to develop regenerative pathway modulators. Fierce Biotech. March 10, 2021.

COVID-19 AIRR-seq Vaccine Data Available!

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The first AIRR-seq dataset from people who have been vaccinated against COVID-19 is now available in the AIRR Data Commons, accessible through the iReceptor Gateway. As more vaccination studies are made available, researchers will be able to compare these antibody/B-cell and T-cell receptor (BCR/TCR) sequences to the over 1 billion such sequences from studies of COVID-19 patients. Vaccines are designed to elicit the same immune response as that caused by natural infection, and the availability of data from vaccinated individuals will enable direct comparisons between these two types of responses. Such comparisons can determine the effect of different vaccine technologies, measure level of protection against circulating variants, and identify immune pressures leading to future variants. For example, this first vaccination study (Goel et al.) that is now curated in the AIRR Data Commons presents data from five recovered donors at three time points: before vaccination and after the first and second vaccinations, and the comparison suggests that COVID-19 recovered individuals may only require a single vaccine dose to achieve peak immune response. Similar comparisons as new vaccination studies become available will help inform public health decisions such as vaccine dosing and booster schedules.

The AIRR Community encourages and supports researchers in sharing their COVID-19 AIRR-seq data from natural infection and vaccination through the AIRR Data Commons. Now more than ever, access to curated, ready-to-analyze antibody and BCR/TCR sequence data will contribute to rapid health insights and public health strategies worldwide as we work to move through and beyond the COVID-19 global pandemic.

For an overview of the AIRR Data Commons, including demos on how to find and share data, see our recent webinar, The AIRR Data Commons: 4 billion reasons to store, analyze and share antibody/B-cell and T-cell receptor repertoire data.