Biovitrum Sheds PC Assets

Remember Biovitrum? That Swedish biotech spun out of Pharmacia in 2001, hailed as a key driver of Europe's burgeoning biotech sector? With revenues of nearly $200 million and a market cap of about $500 million, Biovitrum is a meaty player, at least by Europe's standards.

But it hasn't exactly blown us away with news and dynamism. Since its much-anticipated (but delayed) IPO on the Stockholm exchange in September 2006, it raised only a cautious secondary offering, apparently because of market volatility. Since then, shares have gone in one direction only--downwards. Almost 35% downwards.

Perhaps Biovitrum got a bit comfortable, basking in the $120 million or so annual revenues it receives from Wyeth around hemophilia treatment ReFacto--a legacy of the Pharmacia deal.

Either way, re-invigoration is at hand. CEO Martin Nicklasson, PhD, who joined in May 2007 from his position as EVP and Head of Global Marketing at AstraZeneca, announced his "way forward" for the company this week in London, following a similar session in Sweden.

In a sentence: Biovitrum will scrap its primary care metabolic disease pipeline, re-focus its R&D on specialist programs, build out its commercial presence beyond the Nordic area to Europe through acquiring tail-end assets, and make more of its biotech capabilities.

No surprises there: the world and his dog are going specialist. Most would agree that it makes more sense for Biovitrum to build out a hemophilia franchise around ReFacto--as it's doing--rather than pour millions into small molecule obesity or diabetes. Primary care is expensive (as well as being fraught with failure and highly unfashionable), and Biovitrum, as that rare beast a profitable biotech, wants to stick to the "earn before you burn" mantra.

All sound a bit specialty-pharma-like to you? Consider this: all four of the specialist programs in Biovitrum's clinical pipeline are in-licensed. Exinalda and Kiobrina, both human recombinant bile salt-stimulated lipases, came via the 2005 acquisition of compatriot Arexis. Anti-Rh (D), allegedly the first ever recombinant polyclonal antibody to enter clinical trials (it's in Phase I for prevention of hemolytic disease and for the treatment of red-blood-cell disorder thrombocytopenic purpura) is the fruit of a February 2006 deal with Symphogen. Factor IXFc (longer-acting recombinant Factor IX) came through an earlier 2006 deal with Syntonix (part of Biogen Idec since January....and yes, Biovitrum's deal is secure in the event of another change of control.... )

So does this mean that Biovitrum, born out of Big Pharma and with an above average 350 R&D headcount, faces similar productivity issues to Big Pharma? "It's a debate you can have," acknowledged Nicklasson. But at least the company knows how to in-license.

Can it get any value from out-licensing, though? Consider the clinical assets on the block: a 5HT2a agonist in glaucoma (Phase II recruitment delayed), an A2A agonist in neuropathic pain (Phase II), and a 5-HT6 receptor inhibitor in Phase I obesity trials. Behind those in pre-clinical: a delayed DPP-IV inhibitor in diabetes, and a fat-fighting leptin mimetic.

Roll-up, roll up, supporters of vintage primary-care small molecules.

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Talking of Sons-of-Drugs…

Just when we thought that drug companies had given up on some of their more blatant life-cycle management tricks, snubbed by stingy payors who now know their left-handed from their right-handed isomers, out come Sanofi-Aventis and UCB with news of US approval for their new anti-histamine Xyzal. The Wall Street Journal’s Health Blog was quick to make the link—which the companies’ press release somehow omitted—and proclaim Xyzal as son-of-Zyrtec, which, incidentally, will lose patent protection in September.

Not much new drug company behavior there, then. But WSJ’s timely outing of Son-of-Zyrtec reminded IN VIVO Blog of another, somewhat more unusual Son-of-Drug story that you might just have missed.

Remember Lilly’s problematic Xigris, whose market performance has been as disappointing as the pre-launch anticipation was sizzling? In case you don’t: Xigris came to market in 2001, the first ever treatment for severe sepsis, after years of top-notch protein science and engineering inside Lilly, with many hearts and minds at stake.

Xigris is a case study of, simplistically, how too much innovation can backfire (just as too little can, also). Particularly since Lilly appears (with that wonderful thing called hindsight) to have launched the drug in too broad a population, which led to the brand image being tarnished by cases of serious bleeding. Lilly ain’t giving up on Xigris—there's too much money under the bridge for that. It's busy seeking biomarkers to find out which patients can benefit most. “We’re in invest mode” on Xigris, sum up Lilly executives.

But—and here, belatedly, is the point—Lilly was (after some persuading) quite happy to part with son-of-Xigris, theoretically a better-designed molecule, for not very much money and no claw-back to speak of. The Big Pharma last month quietly licensed the Phase I candidate to a relatively unknown Canadian biotech called Cardiome. Unknown, perhaps, except for the fact that Cardiome's CMO is Chuck Fisher, the man behind Xigris’ development and approval at Lilly.

The deal is somewhat personal, in other words. It's Fisher’s chance to make good what, to put it frankly, went bad within Lilly. He had a job persuading his own board to agree to the deal, even though Cardiome paid just $20 million up front and up to $40 million in milestones (which don’t start until 2009) for all possible indications (and there could be dozens). It’s a risky, if relatively cheap, bet for Cardiome: the drug’s father has proved an expensive failure, and although Cardiome is testing Son-of-Xigris for cardiogenic shock in the first instance, that's still a tricky indication with no pre-clinical models.

Still, if Son-of-Xigris does make it to market one day, in anything, it will be interesting to compare its development and approval path within a small, focused biotech with that of its father, who was brought up in Big Pharma: nature vs nurture. As we’ll suggest in the next issue of IN VIVO, the Xigris family of drugs may just be better suited to biotech. Certainly Fisher reckons he can do a better job marketing Xigris’ offspring than Lilly could.

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