Friday, August 03, 2012

DOTW Is Enlightened In The New Way Of Doing Deals

Enlight Biosciences announced on August 2 that KNODE had entered into a “strategic partnership with AstraZeneca PLC and other industry and academic partners.” Now what you first need to understand about this is that KNODE is not a line of furniture from IKEA (that bin you're looking for is KNODD). Nor are Enlight’s other portfolio companies – Entrega  or Endra.

Rather, KNODE is a company incubated by Enlight and recently emerged from stealth mode; and it is also the name of KNODE’s soon-to-launch web-hosted platform for connecting R&D workers with the information sources and expert individuals needed to form teams and to advance their research. According to the KNODE website, it’s a tool for convening experts in collaborations or projects, for identifying tech licensing collaborators, and for accessing up-to-date information to optimize decision making. According to Baruch Harris, Enlight’s chief business officer, KNODE is also a professional network consisting of R&D scientists – a network turbocharged by KNODE’s proprietary semantic and topic extraction algorithms. Its tagline is “It’s not who you know, it’s who you should know.”

Enlight is a company created by PureTech Ventures in 2008 to address the dearth in financing of early stage technology ideas. Enlight’s members, senior R&D managers at big pharma and big biotech, share challenges, expertise and experiences with the goals of (1) identifying unmet needs in R&D and (2) sourcing solutions. Enlight facilitates the process, and when a potential technology is spotted, proposes to its members that they launch a company to commercialize it. As such, unlike an advisory firm that brings investment grade ideas to its clients, Enlight flips the process, so that its pharma members – the ultimate end users – specify their needs and Enlight tailors a solution.

It’s a novel take on pre-competitive collaboration, but with a commercial twist. The companies that Enlight mints are pushed out into the market place to sell their wares to all comers. Enlight members can chose to invest in the portfolio companies and to partake in the potential upside. Take KNODE for example: AstraZeneca, an Enlight member, invested in the idea and is apparently involved enough to partner with other (unnamed) Enlight members and academic institutions to harvest all their expert knowledge and contacts and so develop the IT platform to the point where it can be launched.

Harris says the platform, currently in “private beta,” will be launched late in 2012. He spoke of a “freemium” pricing model. “Our plan is to make the basic functionality broadly available later this year. But there’s also an enterprise price model, for example, for big pharma companies, where they can have some customization built in. Also, they would give KNODE access to their own internal, proprietary information that probably wouldn’t be available to the outside world. And then, for the version that is available to the outside world, there would be value-added tools layered on top that you would have to pay for.” The enterprise value-added version is planned for an early 2013 launch.

We asked Harris if Enlight had plans to crowdsource the information – about what life science researchers are working on and thinking about – that resides in KNODE, and to use it internally or even to sell it.  "We will be crowdsourcing, not private data from our pharmas, but - on an opt-in basis - people claiming their profiles, editing info, and chiming in on the expertise of their peers and colleagues," he said.

He also said that “capturing the information of our strategic partners is not the first priority for us and respecting privacy and private information is paramount.” Harris adds that KNODE is quite useful for “identifying emerging areas of expertise that people are starting to think are relevant” and that “we’re interested in building profiles and following user behavior, but mainly with the goal of improving the product.”

If the deal aspect in all this seems elusive, here’s how it works: investing members in Enlight’s latest company, KNODE, are collaborating with KNODE to develop and launch the newco’s expert network platform (also called KNODE). Basically, the investors are “collaborating” with their investment.

What’s the payoff? KNODE will sell its platform to all comers. Enlight makes money (it has an equity interest in the newco), KNODE and its investors (Enlight members) make money, and surely PureTech dips its beak along the way.

Ka-ching. It’s the new way of doing deals, brought to you by...

Adimab/Mersana: Two leaders in the antibody drug discovery space have teamed up to build and sell an integrated antibody-drug conjugate (ADC) platform. Antibody discovery firm Admiab and ADC developer Mersana Therapeutics announced a partnership Aug. 1 to offer pharmaceutical manufacturers access to Adimab’s antibodies optimized for use in ADCs made with Mersana’s Fleximer polymer and customizable linkers. Adimab is one of the industry’s leading antibody discovery companies, with a fleet of partners including Eli Lilly & Co., Merck & Co., Pfizer and Genentech. Meanwhile, Mersana’s Fleximer is a novel, biodegradable and bio-inert polymer that can be linked to small or large molecules to enhance their pharmacokinetic and safety profiles. Using Fleximer, Mersana says it can develop ADCs that have advantages over existing ADCs like Seattle Genetics Adcetris and Roche’s trastuzumab-DM1. Mersana announced a $27 million recapitalization July 31, led by new investor NEA, joined by new investor Pfizer, and with participation from existing investors Fidelity Biosciences, ProQuest Investments, Rho Ventures and Harris and Harris Group. NEA's David Mott is the company's new chairman. -- Jessica Merrill

Merck Serono/Prexton: Surprise, Prexton's not a thoroughly modern name your neighbor gave to his newborn son. Actually it might be. But it's also the name given to Merck Serono's latest offspring, the Parkinson's disease-focused spin-out announced July 30. (Go on, send them a Pottery Barn Kids monogrammed seat.) Prexton emerges as the first entity from Merck KGAA's ongoing restructuring with a €2.1 million seed investment from Merck Serono’s Entrepreneur Partnership Program (EPP) and a remit to discover and develop drugs that target the metabotropic glutamate receptors mGluR3 and mGluR4. Prexton will work with preclinical compounds discovered at Merck Serono, says founder and CEO Francois Conquet, who estimated the company will start out about 18 months away from entering clinical development. Prexton hasn't had to go far to find shelter; it's currently setting up shop in the Geneva-based incubator Eclosion, which coincidentally shares an address with another mGluR specialist, Addex Pharmaceuticals (which Conquet co-founded a decade ago and which, it seems to us, would have been a logical home for those mGluR assets). Expect a Series A from the new biotech late next year, says Conquet. -- Joseph Haas & Chris Morrison

Idenix/Novartis: Idenix Pharmaceuticals and Novartis, after nearly a ten year relationship, have all but cut ties. Idenix management announced the changes to the agreement with Novartis on July 31, hosting a conference call with investors to clarify the situation. Under the new terms of the partnership, Novartis has given up all rights to license or develop any of the current or future development-stage drugs in the Idenix pipeline, including three hepatitis C (HCV) drugs currently being tested. Previously, Novartis had the first right to refusal to any of the drugs in the Idenix pipeline that had shown clear safety and efficacy in proof-of-concept trials. According to the original agreement, which was established in 2003, Novartis gained a 54% stake in Idenix for $255 million in cash, as well as the rights to the hepatitis B treatment Tyzeka/Sebivo (telbivudine), and two seats on the Idenix board of directors. Under the restructured agreement, Novartis will relinquish its corporate governance rights and reduce its board seats to just one as long as it retains at least a 15% ownership stake. Idenix will no longer receive any more royalty or milestone payments related to Tyzeka/Sebivo. Idenix also will be obligated to pay Novartis a royalty on any HCV drugs that are not used in combination with a Novartis drug. The restructured partnering agreement gives Idenix more flexibility with partnering discussions for its hepatitis C compounds, but may make other potential partners wary that Novartis didn’t jump on the opportunity. After a blow-up of Bristol-Myers nuc development program due to safety issues, Idenix may appear more attractive to potential partners.-- Lisa LaMotta

image from flickr user John K via creative commons

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