Celtic Therapeutics Starts Antibody-Drug Conjugates Unit

Celtic Therapeutics Management LLLP, a private-equity firm co-founded by a former Pfizer Inc. (PFE) executive, is starting a company to develop therapies that marry antibodies with cancer-killing drugs.

The company, ADC Therapeutics Sarl, will be based in Lausanne, Switzerland, and have an initial budget of $50 million, Peter Corr and Stephen Evans-Freke, Celtic’s co- founders, said in an interview. Celtic will own a majority stake in ADC Therapeutics, which will use compounds developed by Spirogen Ltd., another company in the firm’s portfolio.

ADC Therapeutics will compete with the world’s biggest drugmakers to develop safer and more focused therapies for cancer. Pfizer, Eli Lilly & Co. (LLY), Abbott Laboratories (ABT), Bayer AG (BAYN) and Roche Holding AG (ROG) are pursuing antibody-drug conjugates with partners including Seattle Genetics Inc. (SGEN), ImmunoGen Inc. (IMGN) and Genmab A/S (GEN).

“I’ve been around cancer drug development for 30 years,” said Evans-Freke, who in the 1980s was the lead investment banker to Genentech Inc., now part of Swiss drugmaker Roche. “Peter and I agree this is the most exciting program in our respective careers. We’ve got people knocking down the door trying to get access to Spirogen’s chemistry.”

Board Members

Corr, who retired from Pfizer in 2006, and Evans-Freke will sit on the new company’s board, along with ADC Therapeutics Chief Executive Officer Michael Forer, Spirogen CEO Christopher Martin, former U.S. National Cancer Institute Director Samuel Broder and Barrie Ward, the former CEO of KuDOS Pharmaceuticals Ltd. AstraZeneca Plc (AZN) bought KuDOS for $210 million in 2006.

Antibody-drug conjugates target tumor cells by attaching monoclonal antibodies to cell-killing chemicals. Antibodies are proteins made by certain immune-system cells to identify potential threats such as bacteria and viruses. In conjugates, the antibody acts as a guided missile, binding to a target found on the surface of malignant cells and delivering a toxic payload that destroys the cancer without harming healthy tissue.

For the warhead, ADC Therapeutics will use compounds known as pyrrolobenzodiazepines, or PBDs, a technology developed by Spirogen and scientists at University College London. The drugs slip into a groove of cancer cells’ DNA without distorting the double helix structure, eluding the cells’ repair mechanism and preventing the cells from developing resistance to treatment.

“They’re stealthy,” Spirogen’s Martin said in an interview. The compounds have “a unique mechanism of action, and they maintain effectiveness.”

Development Plans

ADC Therapeutics plans 10 initial preclinical programs over the next year and will start its first human tests in two years. Antibodies have been licensed for seven of the 10 programs, Martin said.

The company’s strategy will be to seek development and marketing partners after proof of concept in the second of three phases of human research generally needed to apply for regulatory approval. Kidney, breast and lung tumors are among those that will be studied, though the board members declined to say which cancers will be targeted first.

“You can do a lot with $50 million, especially when you have a lean, mean machine,” Celtic’s Corr said.

Seattle Genetics, based in Bothell, Washington, won U.S. approval in August to sell Adcetris, which uses antibody-drug conjugate technology, for patients with Hodgkin lymphoma and another form of cancer known as systemic anaplastic large cell lymphoma. Seattle Genetics also has a partnership with Pfizer on conjugate technology.

Roche’s T-DM1

Roche’s Genentech unit and U.S. partner ImmunoGen are developing an antibody-drug conjugate called T-DM1, which combines Roche’s Herceptin breast-cancer antibody treatment with a chemotherapy drug shelved in the 1980s because it was too toxic.

Spirogen, in which St. Thomas, U.S. Virgin Islands-based Celtic Therapeutics owns a majority stake, has an agreement with Genentech to develop conjugates that use Spirogen’s PBDs and linker technology to attach them to antibodies. Spirogen’s Martin said that partnership involves different molecules from the ADC Therapeutics agreement.

“I’m not worried about the competition,” Corr said. “The more in the game is better, because the best will shine.”

To contact the reporter on this story: Kristen Hallam in London at khallam@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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