Benefiting from pharma’s ongoing love-affair with antibodies, Boston-based start-up MSM Protein Technologies signed two validating drug discovery deals in late July. The asset-focused alliance with Debiopharm sees MSM keeping Russian and Ukrainian commercial rights—a small but potentially valuable carve-out that reflects the start-ups roots and the growing significance of Europe’s emerging markets.
Bristol-Myers Squibb Co.’s $2 billion purchase of Medarex in July is proof enough that antibodies are still hot booty. (See "The Pink Sheet" DAILY, Jul 23 2009). MSM Protein Technologies, based in Boston, on July 30 received similar validation for its own antibody-related technology, designed to optimally display complex multi-spanning membrane proteins, such as GPCRs, for antibody drug discovery.
The four-year old biotech signed a drug discovery alliance with Merck Serono to create antibody-based products targeted at GPCRs, which make up a large proportion of existing drug targets but are notoriously difficult to isolate in their natural, membrane-spanning configuration. The alliance also covers products designed to hit other cell-membrane targets. Financials weren’t disclosed, but MSM receives an up-front payment plus milestones and royalties.
As a prominent player in the large molecule field, Merck Serono’s interest provides significant validation for MSM’s technology, funded so far by the company’s founders and ongoing partnering fees. But it was the company’s second deal announced on the same day, with Swiss-based group Debiopharm, which provides the potential future upside for MSM—leveraging its Eastern European and Russian roots.
Russian Roots & Opportunities
The partners will work together to select a GPCR-targeting antibody in oncology, which Debiopharm will have a worldwide development and commercialization license, except for Russia, Ukraine and several other countries in Eastern Europe and Asia, where MSM will retain marketing rights. The smaller group will receive milestones and royalties but will share discovery costs, according to MSM’s Chairman and co-founder Davis Farmer.
As such, "these are two very different deals," Farmer told EuroPharmaToday. The Debiopharm tie-up is transformational for MSM, he says, "because it represents our first jointly-owned program with a global partner." And what that provides, added co-founder, CSO and President Tajib Mirzabekov in the PR announcing the deals, is "the chance to launch what may be the first novel biologic [discovered and developed] in Russia through our Russian subsidiary, Meprotek."
When MSM was founded in 2005, the company needed specialized scientists. Mirzabekov and co-founders David Kreimer, CSO and Research Director Eldar Kim turned to Russia, where all three had completed PhDs (they had all been born in what was the Soviet Union). They looked in particular at a town called Pushchino-on-Oka, designed and built during the 1960s as a center of biomedical research about 120 kilometers from Moscow. "The scientists were just as good as those in Kendall Square," recalls Farmer, "but much more affordable."
The IP Loophole
MSM set up its Russian subsidiary originally as a source of skilled scientists (there are eight employed there today), but "we found as we got more involved that it was quite an interesting market," says Farmer. In particular, he adds, "there’s a lot more freedom from an IP standpoint, because a lot of folk didn’t file their patents in the then-Soviet Union," he explains.
Elsewhere, a so-called ‘IP black-out zone’ stamped out by antibody pioneers including Medarex, Abgenix, CAT, Amgen and MorphoSys against certain well-validated targets (by granting exclusive licenses to these targets) makes life very difficult for anyone else wishing to generate antibody-based drugs against those same targets. Several of these companies are now part of larger pharmaceutical groups (or inextricably entwined), but their efforts to carve out an IP black-out zone is in part what has prompted a wave of so-called second-generation antibody companies, many of which seek to skirt IP no-go area. (See "4-antibody AG," START-UP, November 2007.)
According to Farmer, having the freedom to do basic discovery work in Russia, using tools that the company has developed, MSM can more easily build up the founding bases and data for future product candidates. And in any case, "our expectation is that we will be generating novel antibodies to targets that have not been targeted with functional human antibodies," he explains, declining to go into further detail.
The Commercial Opportunity
During the negotiations with Debiopharm, MSM’s management began to imagine a further, downstream, role for their Russian subsidiary. "We thought, why not be the first to introduce a novel biologic into the Russian market?" MSM has rights to Russia plus most of the other ex-Soviet republics, except Latvia, Estonia and Lithuania, which tend to fall within the distribution systems of European firms). "It’s not a huge commercial market—at 300 million people—but for our subsidiary, it’s an exciting opportunity," Farmer enthused.
With MSM’s pipeline still very early-stage, this opportunity is a long way off. But these deals, and the signal that retaining Russian commercialization rights sends to local companies about MSM’s commitment to the country, may accelerate progress. Indeed, MSM is already in negotiations with a local Russian company on a potential discovery alliance in infectious diseases. The recent deals "will give them a lot of ammunition" to show that we’re credible partners, argues Farmer.
Russia is among the fastest-growing of the so-called ‘BRIC’ countries that most Big Pharma are now hotly interested in. According to IMS, Russia’s pharmaceuticals market, worth €7.5 billion, grew at a compound annual growth rate of over 21% in the 2001-2008 period. There are still problems, not least local corruption and inadequate distribution, but the out-of-pocket and branded generics markets in particular are strong.
An antibody-based drug—likely to be expensive—may be more palatable to the Russian reimbursement authorities if produced by a local player; in the same way that already, Western firms with local manufacturing facilities are positioning themselves to benefit from a medium-term Russian government objective to purchase 50% of drugs from local producers. This commitment is part of a broader plan to increase health care spend to 7% of GDP by 2020 (up from 4.2% currently) and to broaden drug coverage among the population beyond the current 5-10% range. (See "Tapping the Russia-CIS Opportunity: Local Manufacturing May Help Buoy Sales," EuroPharmaToday, June 22 2009.)
The Technology
MSM’s specific expertise is displaying complex membrane-spanning targets like GPCRs in their native conformation—which is what scientists require in order to generate a functional antibody to them. "We have methods for first amplifying the signal [on the cell surface], immobilizing the target and then putting a bear-hug around the protein," explains Farmer, by anchoring it to a magnetic bead. Then they concentrate the target even further, orient it properly and display it without encumbrance from the other materials—including sugar and carbohydrates for instance—that overlay the cell surface. "Only the part [of the protein] that’s displayed in nature is displayed on the surface of the bead," asserts Farmer.
Although confident that MSM’s is the ‘best approach currently’ to displaying GPCRs (there are many others with the same goal, some using cell fractionations or synthetic approaches), Farmer acknowledges that it has been an uphill battle so far. "When you bring new technologies, people are skeptical and reluctant to be the first to take the plunge," he says.
But he’s hoping, with these two new deals and others in the pipeline, that things will get easier from here.
--by Melanie Senior (m.senior@elsevier.com)
