Announced earlier this week, the deal could be worth up to $500m for the Johns Hopkins University spin-out, but could ultimately bring in much higher returns for its new parent.
When it comes to potential for striking back against cancer, Anglo-Swedish-listed pharmaceutical giant AstraZeneca could do much worse than its acquisition of biotech firm Amplimmune.
Announced earlier this week, the deal could be worth up to $500m for the Johns Hopkins University spin-out that has retained close ties with the academia institution. James Campbell is currently on the board of Amplimmune as well as professor of neurosurgery at John Hopkins, having joined in the university in 2009, after handling InterWest’s investment two years earlier.
The exit could ultimately bring in much higher returns for its new parent. Made through AstraZeneca’s biologics research and development unit MedImmune, the deal will allow the pharma company to tap into Amplimmune’s developing cancer drugs.
While not yet revenue generating, Amplimmune’s drugs bolster the body’s immune system in order to fight cancer. The novel approach to battling cancer is early stage research, but it’s a bet AstraZeneca is willing to make. The firm has other immune-mediated cancer therapies in development, as do rivals Roche, GlaxoSmithKline (which three years ago struck a partnership worth $23m up front and potentially $485m more for the rights to AMP-224, a protein that could help the body’s immune system battle cancer and other diseases, Daiichi Sankyo in a partnership with Amplimmune for AMP-110 program struck in December, and Merck and Co, indicating a willingness to back what could be the next wave of cancer drugs. According to investment bank Citigroup, the area has the potential to be worth $35bn a year, making it one of the biggest drug classes in history.
AstraZeneca is also looking to bolster its patent arsenal. Currently, the company’s patent pool is dwindling, with the rights on many key drugs expiring. The Amplimmune acquisition will allow AstraZeneca to not only plug the holes in its pool, but to refill it with patents that could keep the conglomerate stable over the years to come.
As for becoming a part of AstraZeneca, it’s expected that Amplimmune’s transition should be relatively seamless. Its current chief executive, Michael Richman, was previously head of business development at MedImmune, and its chief scientific officer, Sol Langermann, also previously worked at the research and development unit before it was acquired by AstraZeneca. Both firms are Maryland-based in the US, and Amplimmune is expected to be left where it is with its full quota of staff intact.
The acquisition is also a notable exit for research charity Wellcome Trust, one of Amplimmune’s two backers. The charity, alongside venture firm InterWest Partners, came in on a $20m series A which got the company up and running back in May 2007 and its early portfolio of direct investments, such as Amplimmune, has been so successful that last year Wellcome set up Syncona Partners as its £200m ($300m) direct investment vehicle for healthcare and life sciences.
Until 2010, September Ventures had advised Wellcome on its allocation of $1bn of assets in life sciences funds and direct investments in venture backed companies, inl;cuding building a portfolio of $250m in health care direct investments.
