Cashing In On Biopharma Collaboration
By Matthew Pillar, Editor, Bioprocess Online
This article originally appeared in Life Science Leader magazine
How does a biopharma business that’s potentially years away from its first shot at therapeutic sales revenue thrive in a high-inflation, high-interest, supply-constrained business environment?
The answer to that question is arguably more important today than it was back in 1996, when the Italian biopharma Philogen was founded, but emerging biopharma leaders would do well to study the playbook of this innovative company. Our conversation with Philogen CEO, CSO, and cofounder Prof. Dario Neri, Ph.D. on Episode 103 of the Business of Biotech reveals his company’s metered emergence from academia, its avoidance of venture capital, and its rapid realization of revenue through pre-pipeline collaboration.
Offering Drug Discovery Innovation To Big Pharma
Long before its now Phase 3 clinical pipeline took shape, Philogen proved its expertise a marketable commodity among Big Bio suitors. The company has struck collaborative drug discovery deals with J&J, AbbVie, Novartis, Pfizer, Boehringer Ingelheim, and more. Key to being awarded those collaborations was the company’s early recognition of the value of its intellectual property, even if the IP at the time had yet to include a pipeline.
“Today, all of our programs start with the discovery of ligands — be they human antibodies or small organic molecules — isolated from DNA encoded chemical libraries,” Prof. Neri explains. “We always have been strong at creating large DNA-encoded chemical libraries, and we were among the first to work on them.” In fact, Philogen published the first-ever paper on the construction and screening of DNA encoded chemical libraries some 20 years ago. That body of knowledge was quickly deemed marketable. “Since we generate ligands out of our libraries, companies have sought our help for discovery, or for ligands they needed for pharmacodelivery programs. Some of those products have actually moved to the clinic,” he says.
While the focus at Philogen today is on its pipeline, which includes three Phase 3 programs and several more in Phases 1 and 2, the company still generates revenue via these collaborative discovery agreements. Sometimes, Philogen collects a fee for discovery services. In other situations, the company enters into licensing or collaborative agreements. “Most of our industrial collaborations have been consecutive contracts; after the first collaboration, we’ve signed additional agreements with those partners,” explains Prof. Neri.
Founded in 1996, Philogen was cash flow positive from 1999 to 2019 as a result of its collaborative business model, all the while developing a pipeline of its own. It wasn’t until it began pivotal trials of its own candidates in 2019 that it turned to the capital markets for an equity investment to meet its clinical spending needs.
These collaborations have been an important source of revenue for Philogen, but they’re valuable in other ways as well. Prof. Neri lauds the ligand discovery and prototype development learning opportunities they present, as well as the right-angle checks they provide the company. “Collaborating is a good reality check to determine if, and when, our discovery processes are good enough for industry partners,” he says.
How has Philogen found itself in such good collaborative company? Prof. Neri praises the power of publications. The best business development instrument, he says, is a good publication. “Good science and good publications are keys to business development, especially for small- and midsize biopharmaceutical companies.” Learn more about Philogen and Prof. Neri on episode 103 of the Business of Biotech podcast.