By Amir Nashat, Avila Therapeutics Board Member and Partner at Polaris Partners
The risk of early-stage investing in life sciences companies might be overstated, at least for those firms that have a strong model and work within a dynamic community of scientific and medical visionaries.
Polaris Partners’ Avila Therapeutics provides another example where the model for pursuing important, innovative drugs works. This morning it was announced that global biotechnology cancer therapeutics powerhouse Celgene will acquire five-year-old Avila for $350 million in cash plus an additional $575 million in potential regulatory and development milestone payments.
Avila is one of eight Polaris life science companies in the last three years that has moved to acquisition or achieved a successful initial public offering. Polaris was an early Series-A investor in each. Today, the total present value of these deals is over $3 billion, including acquisition dollars and the current trading value of common stock.
One common thread that binds each of these companies was their compelling scientific foundation and transformative potential for treating disease.
In our model, these areas are essential and go hand-in-hand with strong teams. In the case of Avila, we were fortunate to back a truly unique team of repeat entrepreneurs, led by our CEO Katrine Bosley and our Chairman Dan Lynch. Avila CEO Katrine Bosley and Avila VP of Business Development Nagesh Mahanthapa, one of the company’s first full-time employees, were backed by Polaris in prior companies (Adnexus Therapeutics and Alnylam Pharmaceuticals, respectively).
Countering the Counter-Intuitive
Like many of the best early-stage life science companies, Avila’s vision and technology ran counter to industry dogma at its inception. The company’s founder Juswinder “Jus” Singh, a computational chemist formerly of Biogen Idec, had a unique idea: develop a broad class of oral small molecule drugs that form covalent bonds with proteins—connections so strong that they can essentially silence harmful proteins until they are degraded. The proposed model, however, had a number of skeptics. While many of the top selling drugs on the market formed covalent bonds with their targets, the irreversible interactions were serendipitously discovered after the fact. Ironically, no one in industry had thought to develop a platform for discovering “covalent drugs”, believing the approach to be too risky.
Jus Singh and his co-founder Roy Lobb, also a Biogen Idec alum, ultimately found sympathetic ears amongst venture capital investors, partnering with Mike Bigham at Abingworth to craft a plan for a startup based on Jus’s ideas. The company was supported by a strong syndicate, including PVP, Abingworth and strong partners Advent Venture Partners, Atlas Venture, and Novartis Option Fund. With $51 million in equity capital, Avila went to work to efficiently meet scientific milestones and build partnerships. By the end of 2011, the company had advanced three development candidates and formed relationships with Sanofi, Clovis Oncology, and Novartis with potential value across deals of $1.5 billion.
Katrine and the company’s dynamic employees took covalent bond research and development where no one else had previously. The team’s achievements are doubly remarkable when considering the short time and limited resources they consumed to get to this stage.
Avila’s joining with Celgene is a great fit for both companies. The combination of two great companies and their research and development teams will accelerate the advancement of more innovative medicines. At the end of the day, getting better medicines to patients faster is what we are all trying to achieve.