Friday, November 09, 2007

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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