Avalon, GSK found 3 more San Diego biotechs

Total formed under alliance reaches 6

By Bradley J Fikes

San Diego Union-Tribune

Crossing the halfway point in their alliance to form up to 10 biotech companies in San Diego, La Jolla’s Avalon Ventures and UK-based GlaxoSmithKline said Monday they have added three new companies to their portfolio.

Adrenergics, CadheRx Therapeutics, and Calporta Therapeutics, will each receive up to $10 million, along with research and development support from the partners. Previously announced companies include Sitari Pharmaceuticals, Silarus Therapeutics, and Thyritope Biosciences.

The announcement is the latest fruit of the groundbreaking alliance GSK and Avalon unveiled in April 2013, with up to $495 million. Avalon, a La Jolla venture capital firm with an enviable track record in life science investments, scouts for new opportunities. London-based drug giant GSK provides most of the money ($465 million), its own scientific expertise, and expertise in bringing products to market.

The new crop of companies will be housed at COI Pharmaceuticals in La Jolla, where Avalon provides executive management and support for all six companies.

— Adrenergics is developing therapies for dilated cardiomyopathy, a common kind of heart failure

— CadheRx is developing antibodies to attack solid cancers that resist existing therapies

— Calporta targets defects in lipid metabolism called lysosomal storage diseases, such as Niemann-Pick C Disease.

“The hallmark for all the companies is there’s a significant unmet medical need, where we believe there’s a clear path to medicine for the patients,” said Damien McDevitt, a GSK vice president who heads the company’s new San Diego office.

GSK is pleased with the partnership’s progress, McDevitt said, a point also made by Avalon Managing Director Jay Lichter. Both said they’d discussed the possibility of extending their collaboration, but for the time being are focused on the existing partnership.

The Avalon/GSK model is designed to efficiently shepherd biomedical discoveries to clinical development, while controlling costs and keeping focus. It’s also intended to save important science from being lost in bureaucracy. Avalon specializes in early-stage bioscience, which many risk-averse companies typically avoid.

“Avalon is delivering the projects that we were hoping they’d deliver,” McDevitt said. “We love the model, we think it’s a very interesting model, we really like Avalon, so we’re open to doing more together.”

One of the strengths of the collaboration is that it is actually collaborative, Lichter said. The companies extensively discuss their ideas while carrying out the partnership.

“We talk a lot about science, we argue about science — and I mean that in a very constructive way,” Lichter said. “We have different views in terms of perspective. The Avalon team is much more about finding these early-stage ideas that are very tractable to get to a clinical candidate. Glaxo’s much more focused on, once you have a clinical candidate, what’s the development path, what’s the clinical/regulatory path, what’s the market path.

“When you put these two groups together who have expertise in different areas of drug discovery … you get the best of both worlds,” Lichter said.

Avalon’s COI Pharmaceuticals is adding staff as it adds companies, Lichter said. COI now runs 12 companies, half from the GSK collaboration, half outside it.

“We’re well over 40 people now, probably going to 50, and the pipeline of new ideas for companies is still very, very thick and rich,” Lichter said. “The collaboration is working extremely well now, and we’re just going to keep going.”

Even with the growth, that’s still a lean workforce to spread out over a dozen companies. The goal is to efficiently share resources, so more money can be freed up for advancing the research.

Head of GSK’s San Diego office

GSK is emulating that model in its San Diego office. It has little more than a handful of people, intent in seeking out discoveries and partnerships.