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determine the atomic structure of the complex. That tells us where the compound binds to the target, and what we can do in terms of chemistry to build upon that.”
Using structural data to guide the search for lead drug candidates, Hirth says, is significantly accelerating drug discovery at the company. “In most big pharma companies running a program like this, it’s not unheard of to make 5,000 different compounds. We have, in this case, made maybe 100 to get to our lead compound. That translates into enormous time and cost savings. It’s a revolution in drug discovery at work.”
So if Plexxikon has been doing structure-based drug discovery since 2001, why has it taken until 2010 to find a promising disease therapy? That’s partly a story about the benefits and hazards of working with Big Pharma. In 2004 Plexxikon and Wyeth struck a $372 million deal—$22 million up front, and $350 million in milestone payments—to use Plexxikon’s technology to develop compounds to treat metabolic conditions such as diabetes and obesity. But after working with the startup to get a lead compound all the way to clinical trials, Wyeth decided to drop the program, Hirth says, leaving Plexxikon partner-less and payment-less.
So in 2006, Plexxikon started over, establishing a new partnership with Roche, which was interested enough in PLX-4032 to provide $40 million in up-front fees and up to $660 million in milestone payments. Roche is also backing research on another Plexxikon compound, PLX-5568, to the tune of $60 million up front and $275 million in milestone payments.
The licensing fees the startup has collected—$170 million in all—have allowed it to grow on a relatively small base of venture capital. The company has raised only $67 million in venture financing, from a group that includes Advanced Technology Ventures, Alta Partners, Astellas Venture Capital, CW Ventures, Daiwa SMBC Capital, GIMV, Kumho Asiana Group, NIF SMBC Ventures, Pappas Ventures, and Walden International.
“The last round was in 2006, prior to our BRAF deal with Roche, and was a relatively small round,” says Kathleen Sereda Glaub, Plexxikon’s president. “$67 million, for a biotech at our stage, is incredibly low, and that tells you a little bit about our business model, which has been very capital efficient. We have raised money through the pharma collaborations, and we have been able to do them largely around programs that were at the IND [investigational new drug] or Phase I stage, so we have been able to do very attractively priced deals.”
The only bad news, Glaub says, is that the company is doing well enough financially that it has had to pay taxes for the last several years.
If the promise of PLX-4032 pans out, it might send those taxes even higher. Melanoma, after all, affects more than 50,000 people in the U.S. every year, killing 85 percent of them within 5 years of diagnosis. A safe drug that worked more effectively against cancer cells than current drug treatments—chemotherapy drugs such as Dacarbazine and immunotherapy agents such as interferon—could be a very big seller.
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