Finding The Key To Biopharma Start-Up

By James Netterwald, Ph.D.

Antibody-based therapy has been around since the mid-1980s. Since then, there have been thousands of companies that have entered this relatively young area of pharmaceutical enterprise. In the past 10 years, sales of monoclonal antibody-based therapeutics have skyrocketed, growing exponentially over time. For example, in 2006, the five most lucrative antibody-based therapies on the market accounted for over 80% of the revenue generated by the sale of therapeutic monoclonal antibodies. Experts forecast that antibody-based drug development will continue to dominate the market for years to come, with sales in excess of $100 billion. Many small antibody therapeutic developers have their own drug discovery platform to design effective antibody-based therapies to attack specific drug targets, but the trend has been for small companies to out-license these platforms (or the drug candidates produced via these platforms) to larger pharma companies. Bottom line: Antibody-based therapeutics is big business, and a number of start-up companies, armed with an effective platform and a classical business model, are making waves in this market.

A young company that is rapidly making its mark in the antibody-based therapy business is arGEN-X (Rotterdam, Netherlands). The company’s SIMPLE Antibody platform, based on the active immunization of out-bred llamas, generates full-size antibodies that can prove useful to the therapeutic antibody drug discoverer. First, these full-size antibodies have variable regions indistinguishable in sequence and structure from human antibodies, a feature that facilitates the generation of essentially “fully human” antibodies by simply combining those variable regions with human antibody constant regions. Second, what sets this platform apart from other antibody discovery platforms is that the immune system of llamas can “see” many more sites (epitopes) on human disease targets than those of commonly used mouse systems (BALB/c or transgenic). As a result, the SIMPLE Antibody platform can generate a far greater diversity of antagonistic or agonistic antibodies against all types of human disease targets in a highly productive manner as compared with platforms based on in vitro display libraries or transgenic animals.

arGEN-X was founded in 2008 by three experienced and entrepreneurial pharma industry executives: Dr. Hans de Haard, the company’s chief scientific officer and a leading world expert on Camelid immunology; Dr. Torsten Dreier, the company’s chief development officer and a master of preclinical and early clinical antibody product development; and Tim Van Hauwermeiren, MSc, MBA, the company’s CEO.

The cofounders have a track record of success in building successful antibody platform and product companies. Prior to cofounding arGEN-X, de Haard helped build two successful antibody developers: Target Quest, which was acquired by therapeutic antibody developer Dyax; then later he helped design the highly successful Nanobody discovery platform at Ablynx, which is currently one of the world’s leading antibody therapeutic developers. Dreier previously worked at German antibody company Micromet, where he held various R&D positions while bringing biopharmaceuticals to the clinic. Van Hauwermeiren has also been involved in several start-up ventures, including Proctor&Gamble and Ablynx where he was involved in business development. In an interview with Life Science Leader, Van Hauwermeiren discussed the history and inner workings of arGEN-X.

At The Beginning
“The inception of arGEN-X occurred in 2008,” recalls Van Hauwermeiren. “During a meeting with the cofounders de Haard and Dreier, the idea of starting an antibody company was first presented to me. I was very quickly convinced by the strength of the idea and, based on our shared history, I was asked to become the CEO of the new company, which I took on shortly afterwards.”

The founders raised some initial seed funding from two specialized Dutch seed funds and were able to generate some initial data to demonstrate the potential of its new platform. This data, combined with the credentials of the founding team, enabled the company to close an oversubscribed series A funding round in 2009, despite being in the midst of the international financial crisis.

The company received approximately $17 million in this series A round from a syndicate of leading European venture capitalists and officially opened its doors in August 2009. Fortunately, the work to finance the company did not end there, and additional subsidies of approximately $3.8 million in grants from the local government followed. “After obtaining funding, we started to execute our business plan by generating scientific data to validate the SIMPLE Antibody platform, which we believe will create significant changes in our field,” says Van Hauwermeiren.

The company has a core group of 17 employees based in its R&D subsidiary in Belgium, which is situated in the heart of the Flemish biotech cluster and operates with a nodal network of external collaborators that conduct some of the specialized bio-assay, in vivo model, and protein production work.

Rapid Progress
In the short time since its founding, arGEN-X has already initiated five discovery and development programs targeting oncology, autoimmune, and inflammation indications from its SIMPLE Antibody platform. The company’s lead program is with ARGX-109, a novel human anti-IL-6 antibody that neutralizes IL-6 with low femtomolar potency. “ARGX-109 was entered into preclinical development in less than 12 months from start of discovery and was chosen from a panel of 65 functional antagonists generated against IL-6, a cytokine that plays an important role in several of our target indications,” explained Van Hauwermeiren.

“Our value proposition actually consists of antibodies that are at least as good as the gold standard antibodies that are out there,” says Van Hauwermeiren. He adds that although arGEN-X routinely generates antibodies with best-in-class affinity, potency, human homology and manufacturability, the real value added in all antibodies produced on the SIMPLE Antibody platform is that they have “improved functional diversity for their drug target.” Van Hauwermeiren explains the relevance of this for therapeutic antibody discovery as follows. “Disease targets can have very complex structures, having multiple sites of interaction with their environments. Depending on which epitope you manage to bind with your antibody, you may end up with an antagonist, an agonist, an internalizing or non-internalizing antibody, or just with a neutral antibody. Antibodies binding the same target, but on different epitopes, can come with totally different therapeutic properties. So by being able to ‘blanket’ all possible epitopes on your disease target of interest with as many different functional antibodies as possible, you can select the best possible drug candidates. In this way, we generate an unparalleled drug candidate choice, allowing us to select antibodies with the best possible characteristics from a product development point of view, including expression level, stability, and immunogenicity.”

The SIMPLE Antibody discovery platform is one of the features that makes arGEN-X’s approach to antibody-based drug development unique. A second important factor is that antibodies are being discovered with clear product development features in mind. “For each therapeutic program we initiate, we have an agreed targeted product profile in mind,” Van Hauwermeiren states. The approach has enabled the company to develop antibodies against challenging targets, including previously difficult-to-address cell-surface targets, with better functional diversity, and therefore better therapeutic potential, than other platforms.
 
A Collective Approach
arGEN-X was built upon the collective leadership of its three founders and takes pride in its management style. “What we tried to do as a collective management team is to bring in not only the clinical and preclinical scientific perspective, but also the commercial and IP perspective. arGEN-X was a multifaceted business from day one. Therefore, you need all these different viewpoints and have managers who can wear these different hats to make sure the programs you invest in turn out to be profitable therapeutic programs five years from now,” explains Van Hauwermeiren. “My role as CEO is to help the team crystallize its plans, finance them, and, ultimately, execute them. I think it is very important for a CEO — especially at the early stages of a company — to create a vision that everyone shares and buys into.”

In terms of the roles of the other cofounders, de Haard and Dreier carry the full responsibility for R&D. Other members of the management team include Dr. Michael Saunders, senior director of targets and programs, and Dr. Debbie Allen, who was recently appointed senior director of business development.

Saunders has more than 18 years of successful drug discovery experience in biologicals and small molecules, both in large pharma (GSK) and in the biotechnology industry (DevGen, various scaffold companies), spanning several therapeutic areas. In particular, he has extensive experience in target selection and in program management.

Allen has significant experience working in the antibody area as a business development executive and specifically with antibody companies. Her role will be to help arGEN-X identify potential strategic partners and build the relationships with those partners. Additionally, “Dr. Allen will also evaluate how our value proposition is resonating in the marketplace as a basis for driving our research and development efforts,” says Van Hauwermeiren.

“The experience of Dr. Saunders and Dr. Allen is highly complementary to that of the other members of our leadership team, giving us excellent coverage across all areas of therapeutic antibody discovery and development,” he says.

A Classical Business Model
arGEN-X has a simple, classical business model: It aims to build its own internal preclinical product portfolio based on the SIMPLE Antibody platform. What makes the platform so productive is that arGEN-X only needs 10 people at the bench to run its five discovery and development programs. These programs and the pipeline of candidates they generate will build significant value for the company and provide it with strategic options to either 1) out-license the clinical candidates to a large pharma partner in return for license fees, milestones, and royalties or 2) “develop certain candidates ourselves to a later stage before partnering, thereby further derisking the opportunity for partners and retaining more value internally,” states Van Hauwermeiren.

arGEN-X also plans to further leverage the power of the SIMPLE Antibody platform in collaborative agreements with companies focusing on specific antibody targets. Under this type of agreement, the partner company provides arGEN-X with R&D funding in the first instance, but can opt to take promising programs forward through to development and commercialization, which results in further structured payments to arGEN-X based on program success. The company recently announced a deal of this nature with global pharmaceutical company Eli Lilly and Company.

Strategic Objectives
According to Van Hauwermeiren, arGEN-X currently has two strategic objectives. The first objective is “to get a rock-solid validation of the SIMPLE Antibody platform in the preclinical stage. We are doing this in a series of benchmarking studies against challenging, yet highly relevant, disease targets, in which we compare the performance of our platform versus the gold standard phage display and transgenic mouse platforms. Given the fact that the drug format of human antibodies is extensively validated both clinically and commercially, we can perform this benchmarking purely at the preclinical stage,” he says.

The second objective for the company is to build a preclinical product portfolio that can either be developed through collaboration in partnership with pharmaceutical companies or by itself in small clinical trials to get a clinical proof of concept. The key to this approach is the choice of therapeutic targets. arGEN-X applies a portfolio approach to target selection, carefully balancing technical and commercial risks.

Van Hauwermeiren believes arGEN-X’s SIMPLE Antibody platform will transform therapeutic antibody discovery and development. “Generating an unmatched diversity of functional antibodies against human disease targets will lead to better quality candidates that will enter development programs more quickly, which, in turn, will lead to effective therapeutic antibodies being available to patients more quickly and more cost-effectively,” he concludes.