Biotechs to Develop Antibody Therapies, Explore Merger

Downtown Vancouver (Magnus Larsson, Flickr)

8 January 2016. Two biotechnology companies in Vancouver agreed to collaborate on developing antibody treatments for cancer, with an option to merge their enterprises later on. The deal calls for Zymeworks Inc. to make an undisclosed equity investment in Kairos Therapeutics Inc. Zymeworks is also receiving $US 61.5 million in its first venture funding round.

Zymeworks creates engineered antibodies that bind to two targets or epitopes, the parts of antigens that generate an immune response. This design concept, says Zymeworks, enables its antibodies to address complex diseases that require more than one line of attack, as well as combining multiple treatments similar to a cocktail in one therapy. Despite the novel design, says the company, these bi-specific antibodies can be made with today’s monoclonal antibody processes.

Zymeworks also develops antibody drug conjugates, the focus of Kairos’s technology. Antibody drug conjugates combine highly targeted antibodies with chemotherapy drugs, with the potential for fewer side effects than traditional chemotherapy. Kairos Therapeutics is a two-year-old spin-off enterprise from the Centre for Drug Research and Development, an applied pharmaceutical R&D lab in Vancouver, that licensed its antibody drug conjugate technology to Kairos for commercial development. The company says its approach to antibody drug conjugates makes them feasible for precision medicine that can target therapies more directly with fewer side effects.

Kairos and Zymeworks will collaborate initially on antibody drug conjugate therapies for cancer. The agreement gives the enterprises an option to merge later on, which would make it possible to combine their respective technologies and pipelines for other cancer therapies. The companies gave no timetable for the current partnership nor a target date for merger.

Zymeworks is also raising $61.5 million its first venture funding round. Up to now, the four-year-old company was funded by private investments and licensing deals with pharmaceutical companies Merck, Eli Lilly and Company, and Celgene. The new financing is a mezzanine investment, a hybrid of debt and equity capital where loans can be converted to equity ownership. The funding round was led by new investors BDC Capital and Lumira Capital, with participation by Eli Lilly, Celgene, and a syndicate of Canadian and U.S. investors.

The new funding, says Zymeworks, is expected to underwrite the company’s lead Azymetric platform developing bi-specific antibodies. The company’s most advanced therapy candidates are ZW25 and ZW33, engineered bi-specific antibodies addressing overexpressed HER2 proteins associated with breast cancer, with ZW33 adding an antibody drug conjugate. Zymeworks expects to file new drug applications to authorize clinical trials later this year.

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