San Diego’s Pfenex, a Dow Spinout, Signs Merck to $52M Licensing Deal

Xconomy San Diego — 

Pfēnex, which just announced its presence in San Diego last week, today says it has granted Merck an exclusive worldwide license to use its technology to produce specific proteins for use in developing an undisclosed vaccine.

A Pfēnex spokesman says the deal, which could be worth as much as $52 million in total payments, represents one of the biotech industry’s largest gene expression technology licensing deals. Pfēnex also stands to get additional royalty payments on any Merck product sales derived from the agreement. The new San Diego biotech, a spinout from Dow Chemical, got $24 million in an initial round of venture funding, according to a Dec. 9 regulatory filing. Phenex had said its Signet Healthcare Partners led its initial round of funding, but did not disclose the amount.

Pfēnex has developed technology based on modified strains of Pseudomonas-fluorescen, a bacteria that secretes a fluorescent pigment. The Pfēnex technology uses the microbe in a fermentation process to manufacture a variety of protein biotherapeutics, including drugs, vaccines, and diagnostic reagents, that would otherwise require a much more expensive production process based on mammalian cell culture.

Pfēnex says its licensing deal with Merck represents its second commercial license for its proprietary Pfēnex Expression Technology. The biotech did not identify its previous licensee, although Dowpharma, which previously operated Pfēnex as part of Dow Chemical, disclosed plans to work with Pfizer in 2005 to use its technology to help Pfizer develop a protein-based drug that was not identified. Financial details of the agreement were not disclosed at the time.

In a statement released by Pfēnex, CEO Bertrand C. Liang says the biotech’s collaboration with Merck “is a clear example of the strength of the Pfēnex Expression Technology being leveraged in the discovery, development and production of novel vaccines.”