When de-risking, relationships matter

June 2, 2015 ctheodoropulos

De-risking has evolved from literature searches to the cultivation of many wide-ranging relationships throughout the life sciences strata.

“In the ‘old’ days, you’d look for others working with the same mechanism or against the same targets and hope their data lent confidence to your own investigations as you followed in their wake,” said Richard Brudnick, senior VP of corporate development at Biogen. That approach reduced risk, but didn’t encourage great innovation.

Today, “the hurdle for innovation and differentiated benefits is much higher,” Brudnick said, challenging companies to broaden their fields of view. Insights from others’ experiences with the same target or mechanism of action may trigger “changes in your patient population, clinical endpoints or trial design that may lead to better outcomes.”

 Richard Brudnick senior VP, corporate development, Biogen

Richard Brudnick, Senior VP, Corporate Development, Biogen

“In our Alzheimer’s program, for example, we have what we hope is a wonderful molecule and ran a good trial,” Brudnick continued. “We learned the importance of first qualifying patients to ensure they exhibited evidence of amyloid aggregation.” That insight was the result of understanding results generated by developers of imaging agents as well as by those who previously attempted to develop disease modifying therapies for Alzheimer’s disease. Conferences and networking with other researchers are good sources, too, building broader knowledge in the field.

“The other de-risking approach,” Brudnick said, “is to seek partners. Those allies may help develop novel biomarkers or assays that may be useful in humans to demonstrate target engagement or the desired biological effect. There’s a lot you can do.”

Leveraging clusters

Biotech clusters provide the critical mass necessary to find not just a good alliance, but the right alliance at the right time. “A cluster can be a community of like-minded people, as well as geographic,” he pointed out. The Boston area is both. This September BioPharm America™ in Boston will provide the means to leverage this important biotech hub for just such alliances.

The local collection of intellectual capital is one of the reasons Biogen moved its headquarters to Cambridge in 1982, only four years after it was founded in Geneva, Switzerland. The other reason was logistics—one of the four founders was a faculty member at Harvard University, and another was at MIT. The remaining two founders were faculty members at the University of Edinburgh and the University of Zurich.

As its founders show, optimum results can come from working with a variety of institutions. For Biogen’s amyotrophic lateral sclerosis (ALS) collaboration, the company is working with multiple institutions to sequence the genomes of up to 1,000 patients to understand the genetic causes of this disease. These experts “bring relevant skills sets that haven’t always been applied to ALS.

“These scientists and institutions have unique capabilities in running certain types of experiments or analytics for genomic analysis.” By working together, the alliance also creates a larger data set, which increases its scientific relevance. “The collaboration has been enormously productive,” Brudnick said.

Communicate early

Biogen’s sphere of influence also extends to young companies. “It takes enormous courage and commitment to start a company that could change the world. It’s incredibly risky,” Brudnick acknowledged. “Every company, whether large or small, has finite amounts of time and resources. Each choice must make an impact. Small companies feel this intensely.”

To reduce that risk for itself and for young companies, Biogen likes to get to know companies early in their—or their project’s —development. “We like to have conversations and share perspectives on the type of experiments that derive more useful data,” Brudnick said. “Young companies are trying to prove enough of a point to gain funding and take their work to the next step, so knowing what to prove and how to prove it is important. It’s disappointing for all when a young company comes to us with interesting data that, if it had been done differently, would be more actionable.”

Such conversations take place long before an agreement is signed, and may recur over months or even years. This helps Biogen shape the research activities—including understanding and validating the target and mechanisms of action—to better meet its research needs, thus giving its potential partner a greater chance of signing an agreement with the company.

Capital alters the conversation

Agreements with big pharma and big biotech have always been a key goal for startup companies but especially during the lean financing days between 2008 and 2012. “Now we are in one of those wonderful moments when capital is available to people with great ideas and tremendous ambitions. Great teams are able to obtain more capital, and earlier,” Brudnick said. “That’s changed the nature of the conversation with young companies, regarding their hopes and expectations of partnerships.”

The IPO window, which opened about two years ago, forces companies to weigh the relative merits of raising funds in the public market or other dilutive capital options versus the loss of economic or geographic rights that accompany development deals, he said. “More sophisticated companies are taking advantage of the IPO window and are being more thoughtful about potential partnerships.” They’re looking beyond money to closely consider whether an alliance also brings the necessary capabilities to advance their scientific and clinical program.

Only part of that additional scrutiny can be attributed to the greater availability of funds. Young, innovative companies today frequently are led by industry veterans who aspire to remain independent longer, he said.

The improved financial environment hasn’t changed Biogen’s approach to risk or investment, according to Brudnick. “We’ve never had a one-size-fits-all approach. Instead, any partnership must work for both sides.” He advises aspiring partners to be realistic about their capabilities and aspirations, and to also pay attention to the cultural elements of the companies involved in any deal.

Consider corporate culture

“The cultural fit matters,” he emphasized. “Any R&D program will face unexpected opportunities and challenges. Leveraging opportunities and finding solutions depends not only on the quality of the work undertaken, but on the team’s ability to work together and transcend different viewpoints. At the end of the day, partnerships are driven by a meeting of minds…not just by finances, terms and responsibilities, but by the desire to work together towards a common purpose. That’s sometimes overlooked in the headlines.”

Achieving that cultural fit is another reason Brudnick likes to talk with young companies early in their development. “People get to know each other over time, by sharing perspectives and approaches to problem-solving, discussing experiments they believe would be useful and asking questions. Watching each other think on their feet about the science, clinical and business aspects helps develop a rapport.”

An innovation renaissance

“We’re in a period where an explosion of exciting science and innovation are coming of age. Gene editing, gene therapy, immuno-oncology and antisense are just four examples,” Brudnick pointed out.

Biogen’s pipeline focuses on neurology, hematology and immunology. Neurodegenerative disease is a particular interest, with programs in Alzheimer’s disease, Parkinson’s disease, ALS and multiple sclerosis (MS). The goal, Brudnick said, is to develop therapies with meaningful clinical benefit. Biogen also is active in developing therapies for neuropathic pain and fibrotic disease.

Interests include “programs that will file INDs soon, as well as earlier and later opportunities. The ‘who’ is as important as ‘what’ for programs. We want a great scientific team and ideally, people who also understand what it is to translate a scientific insight into a drug.”

Regarding strategic partnerships throughout the industry, “the past is prologue,” he said. “No one has a monopoly on innovation.” But, advancing innovation requires significant capital and symbiotic relationships among a multitude of players.

“Capital markets will have their ups and downs and the ‘flavor of the day’ with regard to favored deal types will change but, five years on, relationships and partnerships will continue to be as important as they are today, and as they were five years ago..”





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