Inspired by nature…
Core business: Drug development
Number of employees: 15
Inspired by nature
Aberdeen-based NovaBiotics is on the brink of a significant breakthrough in drug development – and hopefully a much-deserved return for its investors in the not-too-distant future...
According to the Chief Executive of NovaBiotics, Deborah O'Neil, the company she founded eight years ago has no products, customers or revenues – yet. But it has already attracted investments of £10 million and has completed clinical trials for a drug which could generate £1.5 billion in sales in a market worth an estimated £3 billion a year.
Novexatin® is designed to cure an ugly and painful condition that affects about 12 per cent of the world’s population: onychomycosis, or “nail fungus.”
According to O’Neil, the company is considering raising a further £10 million in funds to further progress this revolutionary new drug towards commercialisation, along with two other potential best-sellers – drugs to fight cystic fibrosis (Lynovex® now has 'orphan' approval in Europe) and candidaemia, a potentially fatal bloodstream infection. In parallel, the company is also in discussions with potential strategic pharmaceutical partners with a view to out-licensing Novexatin® and thereafter jointly developing it for the clinic.
As well as having various patents for Novexatin® and at least 80 other applications pending, O'Neil believes communication is essential to win the support of investors. “We have to keep them updated with all and any tangible technical progress within the company,” she says, explaining that this is important if investors are to “keep the faith” in the longer-term value of the company's platform and pipeline products – recognising that development life-cycles tend to be much longer for biotechnology than for most other sectors.
“Raising funds in this sector often feels like being on a treadmill,” says O’Neil. “Rather than moving on from Round A to Round B and so on in the traditional sense, we’ve been more focused and leaner in our financing model, but this has meant going from A to Z and round again.
“This is true for most early to mid-stage biotechnology companies and their need for cash,” she adds. “The industry model has moved on, but the majority of the investment community hasn’t caught up yet – an exception being our investors, who have stepped into the breach to support us and get us further down the development track than originally planned.”
O’Neil identifies three “key pieces of data” which investors rely on:
1 effectiveness of drug candidates over the competition and key differentiators
2 safety of the drug over competition – marketed and in development
3 good market research to support claims of commercial potential of each product candidate
With Novexatin®, it’s also important that it penetrates the nail, so the drug reaches the target fungi.
The market leader in nail fungus treatments (Lamisil tablets) only offers a success rate of 38 per cent in patients with mild to moderate disease, relapse is common, and this and other systemic antifungal treatments are associated with well-described side effects and safety issues. The currently available topical (brush-on) treatments have even worse efficacy profiles than Lamisil. But according to O”Neil, Novexatin® (which is also a topical treatment) acts ten times faster than the “best of the bunch” of these products and has a ten times better success rate, according to studies conducted so far. In addition, it only needs to be applied once a day for a month.
The other key products in the company’s pipeline are Novamycin® and Lynovex® (see below). The latter recently gained “orphan drug status,” so it can be fast-tracked to clinical trials on the basis that it treats a relatively rare condition – cystic fibrosis – which only affects about 70,000 people worldwide. Other products in the portfolio are designed to treat conditions such as MRSA, acne and dandruff.
Lynovex®, says O’Neil, is a classic example of serendipity in science. While investigating compounds which might assist in getting drugs to penetrate nails, as part of the development of Novexatin®, the research team discovered a compound which could disrupt bacterial biofilms that are the major issue with the lung infections associated with cystic fibrosis.
NovaBiotics designs and develops novel drugs, but manufacturing and marketing will be handled by its commercial partners – major pharmaceutical/biopharmaceutical companies – who will pay licensing and development milestone fees to NovaBiotics, as well as royalties for every product sold once the drugs reach market. This will leave NovaBiotics to focus on what it does best. “We design the drugs and license the recipe to pharma,” says O’Neil.
According to O’Neil, revenue from these alliances will be “returned to the shareholders and re-invested into pipeline development, to facilitate expansion and maximise even greater investor returns.”
“The big pharmaceutical companies no longer focus on R&D,” she continues, “and don't tend to licence or acquire technology until the later stages of clinical development.” In recent years, there’s been a global cull of research in pharma, she adds. The blockbuster drugs developed in the 1980s will soon drop off the more and more to biotech to come up with the new drug classes and real innovation – but it tends not to adopt these new candidates until they are sufficiently ‘de-risked’ in their development cycle.
The development cycle for Novexatin® has been longer than anticipated when the business was first spun out, says O’Neil, mainly because pharma wanted later-stage assets, and as a result of the failure of three potential rival products in the course of their development, which created a greater degree of scepticism in the industry. “This is understandable,” says O’Neil.
“Nail fungus is a very tough clinical problem to solve, but our completely differentiated approach is certainly succeeding so far.”
In the early days of NovaBiotics, Scottish Enterprise saw the potential of the technology, but believed it was “too close to market” for proof-of-concept funding. NovaBiotics co-founder John Pool, as Business Biotechnology Advisor for Scottish Enterprise, saw the huge market potential of focusing the platform on one very large commercial opportunity and put his finger on the button when he asked O’Neil if her new technology could tackle nail fungus.
O’Neil admits that if Pool hadn’t shaped the strategy at this point, things could have been very different: “I may have been more interested in other applications for the technology, particularly life-threatening conditions like MRSA.”
Pool has stayed with NovaBiotics right from the start, including a spell as the company Chairman, and has helped to bring in a string of early-stage investors. “He was my mentor and my anchor in the spin-out stage,” says O’Neil.
O’Neil today is just as fascinated with the fight against infections (and mucosal immunology) as she was as a PhD student in London. She is full of praise for her academic mentors and supervisors and the people she worked with in London, California and Belgium, as well as in Scotland. In San Diego, she began to realise how drugs based on the antimicrobial peptides we make in our bodies could play a key role in fighting infections, and this was what inspired her current pipeline. In Belgium, she learned about commercialisation and at the Rowett Research Institute in Aberdeen, she developed her ideas to the point where she was ready to establish the company and “dip her toes” into business, turning peptides into druggable molecules.
Nail fungus may not be the sexiest problem in science, but for NovaBiotics and the people behind it, this is just scratching the surface...
NovaBiotics focuses on the design and development of novel anti-infective therapies for difficult-to-treat infectious fungal and bacterial conditions, (including life-threatening infections such as candidaemia and cystic fibrosis), using its “unique patented peptide anti-infective technology” – drugs based on the antimicrobial peptides produced in our bodies “as the first line of defence against any infectious challenge.”
Peptides are simple chains of amino acids. And insulin is another example of a peptide drug.
NovaBiotics’ technology is not only “more effective and safer than conventional antimicrobials”, but also kills rather than merely inhibits the pathogens that it targets and, in so doing, minimises or even rules out the risk of antibiotics drug resistance developing.
To develop drug candidates ready for clinical trials, NovaBiotics uses an approach called “rational drug design” which fast-tracks the process by working back from knowledge of the molecules that nature uses to fight infections and turning them into therapies, rather than screening hundreds of thousands of chemical compounds to find one that works. This can cut the time it takes to get a drug to market by up to 75 per cent – down to only five years in the case of Novexatin®.
Says O’Neil: “It can take 12 years and at least $2-$7bn to get a drug to market – unless you do it the NovaBiotics way, which gives you more years of sales whilst the drug is still on patent.”
NovaBiotics has three key products in the pipeline:
Novexatin® is a brush-on treatment for fungal nail infections (onychomycosis). It not only addresses the underlying cause of the problem by killing the fungi but also improves cosmetic appearance of the nail. Market potential: $3 billion per year.
Lynovex® tackles both of the major clinical problems in cystic fibrosis (CF) by breaking down excessive mucus in the lungs, killing the bacteria responsible for the chronic recurrent airway infections associated with CF and also preventing formation of the slimy biofilms which these bacteria form to protect them against antibiotic effects and immune system clearance. The market is expected to be worth $2 billion by 2014 and individual treatments currently cost about $20,000 per patient per year. Lynovex® received orphan drug designation for the treatment of CF in Europe in October 2011.
Novamycin® is an antifungal peptide for the treatment of the bloodstream and deep-tissue infections caused by Candida and other yeasts and moulds. Novamycin® is also being developed as a treatment for oral pharyngeal Candida infections and vulvo-vaginal infections. The cost of current treatments for bloodstream Candida infections can run to tens of thousands of pounds per patient, with survival rates as low as 20 per cent and drug resistance also a problem. The global market is forecast to be worth $5.7 billion by 2014. Novamycin® was developed from the same technology platform as Novexatin® and therefore has already been significantly de-risked.