all the information, none of the junk | biotech • healthcare • life sciences

GlycoFi Figures Heavily into Drug Giant Merck’s Follow-on Biologics Plans

Xconomy Boston — 

We’ve seen it before. A large pharmaceutical company buys a small biotech firm, the acquired startup ships its science and technology to the big buyer, and we never hear about the little company again. But GlycoFi, a Lebanon, NH, life sciences startup acquired by U.S. drug giant Merck for $400 million nearly three years ago, seems to be an exception. It’s grown up since the acquisition and is now the focal point of Merck’s strategy to become a major force in the business of making copycat versions of biotech drugs.

Whitehouse Station, NJ-based Merck (NYSE:MRK) revealed in December that it had launched a follow-on biologics unit called Merck BioVentures, capitalizing on GlycoFi’s recombinant yeast technology, to enable the company to develop copies of protein-based drugs faster and cheaper than the competition. And many of the special yeast strains that Merck BioVentures will use to produce the biologics will be engineered right at GlycoFi’s Lebanon laboratories, Barry Buckland, vice president of bioprocess research and development at Merck, tells me. Merck is also using the GlycoFi technology, he notes, to develop novel drugs.

“Certainly there’s a clear effort to keep the [GlycoFi] group strong and make sure they have the resources they need to be productive,” says Buckland, who has overseen the integration of GlycoFi’s technology into Merck’s vast operation. In addition to investing in improvements to the GlycoFi technology, he says, the operation in New Hampshire has grown from 54 employees to roughly 66 workers since the 2006 acquisition.

It’s common for the innovation community’s interest in biotech startups like GlycoFi to wane after they are acquired or cease to exist as independent entities. For those of you who don’t remember GlycoFi, Dartmouth College bioengineering professor Tillman Gerngross founded the company in 2000 and engineered a handsome return for venture investors such as Polaris Venture Partners, SV Life Sciences, and Borealis Ventures. (In February, Gerngross pointed out the GlycoFi labs to me while giving a brief tour of the incubator building where the group still operates and where he has located his newer biotech startup, Adimab, of which he is CEO.)

Yet what is notable about GlycoFi is the leading role it’s now playing in Merck’s major initiative to develop follow-on biologics, which are treatments that consist of recombinant proteins or other biological materials. The GlycoFi technology is used to engineer pichia yeast strains that can yield proteins that have human rather than yeast carbohydrate structures, instead of using mammal cells to produce such proteins. These genetically engineered yeast cells are also designed to produce batches of proteins with lower variability in form than proteins made from mammalian cell lines. Buckland explains that the yeast cells grow much quicker than mammalian cells, which shortens development and manufacturing times, and could reduce the cost of making biologic drugs at Merck.

GlycoFi’s technology has already been used, Buckland says, to engineer yeast cell lines for the production of Merck’s first follow-on biologic, a new version of an anti-anemia protein called erythropoietin. This protein is used to make what is known generically as epoetin alfa, which biotech giant Amgen (NASDAQ:AMGN) markets under the brand name Epogen. Thousand Oaks, CA-based Amgen raked in $2.5 billion on sales of Epogen last year. Merck plans to begin sales of its version of the drug in 2012, followed by five more follow-on biologics launches by 2017, according to the company.

GlycoFi is now part of a Merck BioVentures unit for which Merck has committed $1.5 billion to support the research and development of follow-on biologics until 2015. Buckland says much of that money will be spent on clinical trials, yet Merck plans to continue to invest in the GlycoFi operation.

So though GlycoFi is just a tiny part of Merck, which has some 55,000 employees worldwide, the parent company has big plans for Lebanon operation.