When New York hedge fund manager John Taylor co-founded Inspiration Biopharmaceuticals in 2004, his main goal was to help his son, who suffers from the blood-clotting disorder hemophilia. So he and co-founder Scott Martin—a Texan who also has a child with hemophilia—set up a virtual biotech company and began pursuing new treatments for the disease. They were a far-flung group: Their chief scientist, for example, was based in Laguna Niguel, CA. “When you’re 12 people in 18 different labs and universities, the lines of communication get difficult,” says Taylor, who is the CEO and founder of FX Concepts, a New York-based hedge fund and foreign exchange management company. “I used to joke that we were a biotech company with no running water.”
As of January 1, Inspiration has gone non-virtual, and yes, it has plenty of running water. The company has moved into its new home at One Kendall Square in Cambridge, MA, where it’s under the tutelage of former Genzyme executive John Butler, who became CEO of Inspiration in October. The company expects to expand its staff from 60 to 100 by the end of 2012 and to file for FDA approval of its lead hemophilia compound in the first half of the year. On December 22, Inspiration announced four new executives had joined the company, two of whom also came from Genzyme.
The access to so much biotech expertise was key for Inspiration, Taylor says. “Massachusetts is a spectacular place to be when you’re in the hemophilia business,” he says.
Inspiration’s lead compound, IB1001, is a form of “recombinant factor IX,” a bioengineered protein that helps blood to clot properly. It is not the only version of the protein to be developed: Pfizer (NYSE: PFE) markets factor IX under the brand name BeneFIX. But, says Inspiration CEO Butler, that product has sometimes been in short supply, and its cost can be prohibitive topatients in developing countries. Inspiration has developed a production method that’s designed to yield more of the protein at a lower cost than currently used biotech processes can. “We think it will allow us to go broadly into the global population of hemophilia patients,” Butler says. “A second product in the market will be a positive for patients.”
Inspiration is also developing a pig-derived version of a protein known as factor VIII, which some patients with hemophilia lack. Butler says there’s a risk that patients will develop antibodies against Inspiration’s drug, called OBI-1, because of its porcine origins. But if all goes well in the human trials, and patients respond positively, “it could be used very broadly,” Butler says. Inspiration recently started human trials and expects to release data late this year.
OBI-1 helped bring Inspiration to the Boston area. In January 2010, Inspiration licensed the compound from Paris-based Ipsen Group, which has a large research and manufacturing operation in Milford, MA. Under the terms of the agreement, which was expanded in August 2011, Ipsen has European marketing rights to both hemophilia compounds and has vowed up to $259 million to the company in up-front and milestone payments. Prior to the Ipsen deal, Inspiration raised about $55 million privately, Taylor says, most of which came him and co-founder Martin.
Ipsen currently owns about a 40 percent stake in Inspiration, with warrants that could boost its stake to 47 percent. Ipsen also has an option to acquire Inspiration outright, provided certain “triggers” that have not been disclosed are met.
Inspiration is part of Ipsen’s recently bolstered commitment to increasing its presence in the northeast. On December 15, the French firm announced that it would invest $45 million in its Milford location, which will entail renovating its two existing structures there and building a new 62,000 square foot R&D facility. It will also move its U.S. headquarters from Brisbane, CA, to Bridgewater, NJ. “Given our Ipsen partnership, being on the east coast makes the most sense for Inspiration,” Butler says.
During his 14 years at Genzyme, Butler held several positions, including, most recently, chief of the company’s rare genetic diseases division. Inspiration’s roots were key to Butler’s decision to join the company as CEO, he says. “Coming from Genzyme, the culture of being close to the patient was important to me,” he says. “Inspiration was founded by patient advocates—that was initially the hook for me.”
Co-founder Taylor, who serves as Inspiration’s board chairman, says he’ll be traveling from NYC to Inspiration’s new headquarters about once a month. He continues to be motivated by his son, who is now 22 and doing “fantastic” on currently available treatments, he says. But his care is costing the family’s health insurer about $700,000 a year, he says. “Only 25 percent of the world’s population [of hemophilia patients] is treated,” Taylor says. “It’s too expensive. That’s one of the big problems we’re trying to address.”
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