The two companies will collaborate on development and commercialization of antibody-based cancer immunotherapies.
After long years of promises and expectations, at last biopharmaceuticals company Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN) has signed a high-value commercialization agreement. The company announced the signing of a collaboration and license agreement for the research, development, and commercialization of antibody-based therapeutics for cancer immunotherapy against two novel Compugen discovered immune checkpoint regulators. Under the terms of the agreement, Bayer HealthCare (Bayer) and Compugen will jointly pursue a preclinical research program. Subsequently, Bayer will have full control over further development and have worldwide commercialization rights for potential cancer therapeutics.
Under the agreement Compugen will receive an upfront payment of $10 million, and is eligible to receive over $500 million in potential milestone payments for both programs, not including milestone payments of up to $30 million associated with preclinical activities. Additionally, Compugen is also eligible to receive mid to high single digit royalties on global net sales of any resulting products under the collaboration.
"Bayer is committed to translating the science of cancer research into effective therapies helping people affected by cancer live longer and improve their quality of life," said Prof. Andreas Busch, Member of the Bayer HealthCare Executive Committee and Head of Global Drug Discovery. "Antibody-based immunotherapies are promising approaches in oncology which can stimulate the body's own immune cells to fight cancer cells. Immunotherapy is one of our focus areas in oncology research. We are looking forward to expanding our portfolio in this area through partnering with Compugen."
Compugen president and CEO Dr. Anat Cohen-Dayag added, "We are very excited to initiate this collaboration with Bayer, a leading global life science company with a broadening oncology franchise, for the development of antibody-based cancer immunotherapies against these two promising novel immune checkpoint targets. In addition, we believe that the prediction and validation of these two targets, through the use of our broadly applicable predictive discovery infrastructure, provides additional validation for our long-term commitment to establishing this unique capability".
The immunotherapy approach aims at combatting cancer by stimulating the body's own immune cells. The tumor and its environment suppress the ability of cancer patients to develop an effective anti-tumor immune response and in this way protect both tumor growth and survival. Compugen has discovered two novel immune checkpoint regulators that potentially play a key role in immunosuppression. Researchers at Compugen are developing specific therapeutic antibodies that are geared to block the immunosuppressive function of these targets and to reactivate the patient's anti-tumor immune response in order to fight cancer.
Products developed by the Weizmann Institute have $20 billion in annual sales.
The campus of the Weizmann Institute of Science gives a sense of abundance to those entering its gates. Researchers and employees also report a sense of pampering. There is little talk about the crisis in universities' budgets common at other research universities. The Weizmann Institute's message to its researchers is, "Take what you need; equipment, an office, and peace of mind, and do research."
A substantial part of the Weizmann Institute's NIS 1.b billion budget comes from Yeda R&D Company Ltd., its technology transfer arm, which turns its inventions into patents for which it charges use royalties. The Weizmann Institute reportedly earns $50-100 million year from Yeda, 10-20% of its budget, an exceptional amount by the standards of Israeli and foreign technology transfer companies.
Products based on the Weizmann Institute's technology have $15 billion in annual global sales."
At a conference a year ago, Naiberg estimated patents commercialized from Israel's universities underpinned products with $20 billion in annual global sales.
Naiberg was interviewed after years of quiet by Yeda. The secrecy seems to have been due to a wish to avoid jealousy and envy, and maybe a wish to show governments and potential donors that the Weizmann Institute can get along without them. The modesty about the income from the applied sciences is also in line with the Weizmann Institute's attitude that this income is merely a side benefit, nice but not necessary, of investment in basic science, which is the institute's real purpose.
Whatever the reasons for the long period of quiet, Yeda and Naiberg are now willing to open up, for the first time, although not about finances. But the huge success in the past raises the question whether the Weizmann Institute can keep its global standing. Naiberg admits that it's a challenge. Referring to the innovative method for actively identifying technologies at research institutes, collaborating with the researchers, extensive registering of patents, proactive entrepreneurship, and ties with big companies and start-ups, he says, "Israeli commercialization was once very innovative and a breakthrough, but the whole world has since learned our model. It is now being applied, but with more generous government and budget support. The US is working very hard, and Asia is working very hard, in China, Hong Kong, and Singapore." Therefore, if Israel wants to keep its competitive advantage, it will have to allocate the same level of budgets.
Before looking to the future, the products which brought Yeda fame should be mentioned. First and foremost is Copaxone, the blockbuster treatment for multiple sclerosis produced by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). The Weizmann Institute drew up an extraordinary deal in many ways: the agreement was signed relatively late in Copaxone's development process, after it had already passed a human feasibility trial; and the institute kept a substantial part of the pie. Few people know it, but at some point, Teva returned the technology to the Weizmann Institute, which will continue to develop it, and when Teva asks to repurchase the product, the price will go up.
Second, the product is a blockbuster, with more than $20 billion in sales. Third, Copaxone's was Teva's first purchase of a product that was not a generic drug, and for this reason it may have been less tough in the negotiations (the case ended up in arbitration, which the Weizmann Institute won). "I don't think that Teva regrets this deal," says Naiberg dryly about the product which made Teva into the Israeli giant that it is today. Copaxone's patent is due to expire in two years. Yeda reportedly earned 8-9% on Copaxone's sales, amounting to around $2 billion.
Another blockbuster drug was Rebif, also for the treatment of multiple sclerosis, which the Weizmann Institute and Merck Serono SA developed through a joint venture InterPharm (now Inter-Lab Merck Serono's R&D center in Israel). The Weizmann Institute sold its stake in InterPharm for a few tens of millions of dollars, taking royalties on sales instead. Rebif has more than $1 billion in annual sales, and the institute apparently earns 2-3% on sales during the agreement period.
Israel's life sciences industry was disappointed when Serono decided to move InterPharm's plant from Israel and produce Rebif overseas. Serono promised that, in view of the success of its relations with the Weizmann Institute, it would set up new plants on the basis of additional products originating from the institute. The collaboration has not yet yielded another blockbuster drug, but Serono has an R&D center and incubator in Israel - a direct result of the Weizmann Institute connection.
A third product is Erbitux, for the treatment of colorectal cancer. It is somewhat different from Copaxone and Rebif, because Yeda never commercialized it. The drug was wholly developed abroad with the help of a former Weizmann Institute research, Prof. Joseph Schlessinger. Only in retrospect did the Weizmann Institute notice that it owned one of the basic patents for the drug originating from an article by its researchers.
Naiberg, a lawyer by profession led the Weizmann Institute's fight. "This was a dramatic time, a real experience, because patent cases usually do not reach claims in court," he reminisces.