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European biotech industry sees success and optimism rise over new Horizon

Authored by Karl Simpson

The biotech business has been a tough business over recent years, not least in European where the business climate has been a little tricky to say the least. So the succession of positive news stories emanating from the ‘old continent’ this week were evidence that perhaps the sun is rising on the European biotech horizon once again. If sentiment is to be believed as an indicator of market bullishness, there is a much improved outlook over 12 months ago.

First off, let’s take Morphosys, they have secured a potentially highly lucrative deal with the cancer therapy powerhouse, Celgene. Celgene with a very positive cash position have been steadily making strategic deals across the US and now they have dipped into Europe with an initial upfront payment of $92m as well as $60m of Morphosys shares purchased by Celgene at a 15% premium. The deal gives Celgene worldwide rights to MOR202, a fully humanised monoclonal antibody targeting CD38 to treat patients with multiple myeloma. This puts them squarely in a competitive space with another European biotech, Genmab who did an earlier deal with J&J for their CD38 asset. Celgene said the deal has the potential to climb to $818m if all the milestones are met.

Then there was Netherlands based Prosensa, the much famed Duchenne Muscular Dystrophy therapy company, who with their partner GSK are in a head-to-head race to the tape with US competitor Sarepta for the first exon-skipping disease modifying therapy for this rare disease. Double news for them this week. Firstly, they got through the IPO gate and raised $78m by selling 6 million shares at $13, valuing the company at $455m. Linked to the deal with GSK, in separate news, the FDA granted breakthrough therapy designation to drisapersen to treat DMD.

Then Immunocore Ltd, the Oxford UK based biotech developing novel biological drugs known as ImmTACs to treat cancer and viral diseases struck a deal with Genentech. The deal represents an initial upfront of up to $20m per programme and has the full potential to garner in excess of $300m in development and commercial milestone payments for each target programme and significant tiered royalties.

Heptares up next and they put $21m in the coffers through a series B round co-led by the Stanley Family Foundation and Clarus Ventures. Barry Kenny who used to be with Takeda and is the companies CBO used to be with Takeda, so Takeda Ventures were a prior investor and jumped in again on this syndication. It will see the UK biotech through 2016/17 and to enable them to move more of their pipeline into the clinic. Their lead programme is a small molecule indicated for cognitive impairment associated with schizophrenia and Alzheimer’s.

Then there was Belgian based Complix, which we covered in an earlier article which can be read here.

So it has been a tough spell for European biotech, not least in raising money. Many companies have had to get very creative to get funds and some of them pursued grants through the FP7 programme. And there is news there too. FP7 finishes this year and EU commission announced this week that a 70 billion euro deal is very near for the Horizon 2020 programme, a programme to stimulate innovation and research between 2014-2020.

Not a bad a week then for the European biotech scene and reasons for us all to start believing that a new dawn is very much on the Horizon.

Posted in M&A Finance and Funding, Orphan Drugs and Rare Diseases, Pharmaceutical business | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment




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