Advancell – pioneering Spanish biotech
This article was originally published in Scrip
Founded in 2001 by researchers from the University of Barcelona and the experimental hepatology unit of the La Fe University Hospital in Valencia, Advancell is moving on from being in the start up phase and heading towards growth. The company is certainly sending a strong message to investors – to invest in Spanish biotech to take it to the next level.
Advancell held the second biggest financing round in Spain last year, attracting €7.5 million, which together with an extra €3.5 million in government loans was enough to secure finances for the next three years. This is a significant achievement as securing enough money to develop a company is more of a challenge than financing a start up, said Dr Ruiz. "€5 million is as difficult to find as €20 million at this stage," he commented. At the same time cash out flow is "very low compared with the standards of the industry", said Dr Ruiz. Indeed turnover in 2007 reached €4.3 million, up from €3.7 million in 2006. Meanwhile expenses rose from €3.6 million in 2006 to €4.7 million. "We are creating very high value with a very low burn rate," he said.
Aside from a number of promising product candidates, the company benefits from its business model that drives value and generates revenue. The company is now divided into three units: the services and reagents division, the pharma unit, and the nanomedicine unit. The former, which offers a broad spectrum of in vitro services, contributes substantially to revenues and helps minimise the burn rate generated by the pharma unit. "We expect this division to be fully profitable very soon," said Dr Ruiz.
Meanwhile the pharma therapeutics division and the newly-created nanomedicine division drive value with an array of promising candidates. Crucially, the pharma unit also keeps its burn rate relatively low by developing compounds that have already demonstrated some proof of efficacy. This reduces risk and costs as well as cutting the time to deliver a product to clinical trial to less than two years.
The pharma unit boasts the company's most promising compound, Acadra (acadesine), a candidate for B-cell chronic lymphocytic leukaemia (B-CLL). With around 300,000 patients suffering from B-CLL across the world, the market for Acadra could be worth up to €250 million. The product was granted orphan status by the EU in 2005.
In vitro tests revealed that the compound destroys B-cells, but crucially and unlike treatments currently in use, it does not destroy T-cells. Destruction of T-cells can lead to a substantially increased risk of severe infection. Phase I/II clinical trials designed to evaluate the safety, efficacy and tolerability of incremental individual doses of Acadra are now underway in Belgium, France and Spain.
Acadra also illustrates one of Advancell's key strengths – its ties with academia. The company is widely regarded as a leading academic spin off company and an excellent example of how to transfer knowledge from academia to the commercial sector. "Acadesine, the company's most important candidate, was discovered by our alma mater university – the University of Barcelona – and we did a good job of bringing it to a "partnerable" status". Indeed, in 2006 Advancell joined forces with the UK-based biopharmaceutical company Prothericsto develop the product. Not only did this mark Advancell's first international deal, but it also "gave investors a lot of confidence and was one of the reasons they took part in our €7.5 million equity round last November", said Dr Ruiz.
The company's nanomedicine unit also looks set for success. Expected to generate €1 million in 2008 through government loans and revenues of €600,000, it is a sustainable business unit that carries less financial risk than the pharma unit.
The unit's most important project, and also a key value driver, is the collaboration with Spanish dermatological specialists ISDIN to develop a Dermosome Technology (DT)-based topical formulation of the immunosuppressant ciclosporin for the treatment of psoriasis. DT is a delivery system developed by Advancell that helps encapsulate a wide range of compounds or complex molecules, including peptides or small proteins, to increase exposure to the active compounds and retain the drug at the site of action while protecting them from degradation.
The product has shown promising results in recent Phase I/II proof-of concept trials (Scrip online, June 2nd, 2008), which "are really encouraging as they validate Dermosome Technology as a potential disruptive delivery technology for skin disorders", said Dr Ruiz. More dermatological products using this technology are therefore likely to follow, also in partnership with ISDIN.
Although still in the exploratory stages, another of Advancell's nanomedicine projects could have "groundbreaking" potential, said Dr Ruiz. Last year the company joined up with the Spanish biotech group Genetrix to create Fénix, a new company that will develop a topical gene therapy for epidermolysis bullosa, a rare genetic disease that affects around 200 people in Europe. The condition is caused by a lack of laminin or collagen (proteins that bind the epidermis to the dermis), which results in skin-loss and blistering with the patient in a constant wound healing state.
A nanosystem developed by Advancell will use non-viral vectors to deliver the absent gene recurrently to the patient's tissue so that it can express the required protein, potentially resulting in a cream that could "alleviate some of the more terrible symptoms of this disease", said Dr Ruiz . "We are using this disease as proof of principle; from there you can move into more general diseases. Probably in the next two years we will be working on the first clinical trial," he added.