This blog post was written by Ros Deegan, CBO of Bicycle Therapeutics, as part of the From The Trenches feature of LifeSciVC.
It’s heresy to write this but it’s trains not bicycles that come to mind when describing our partnering strategy at Bicycle Therapeutics. We’re looking to speed Shinkansen-style towards our goal of being an integrated oncology company while monetizing the platform and building an engine for future growth in additional diseases. We can only do this by establishing partnerships both inside and outside of our core therapeutic area. Partnering outside of your core expertise can be challenging since you are pitching early-stage data from your lead therapy area, the relevance of which may not be immediately apparent. Despite these constraints, we’ve stayed on the tracks by applying four key principles:
- Seeking foundational patent protection so we can approach potential partners from a position of strength;
- Identifying areas of high value and pitching these instead of relying on partners to find the value;
- Avoiding distraction both in the deal process and in the resources behind the deal; and
- Building and leveraging broad networks
As a train-o-phile by marriage, here are a few iconic journeys to illustrate these principles along with what I’ve learnt on my travels.
My annual vacations tend to be a little esoteric. I completed the Trans-Mongolian railway journey from Moscow to Beijing in 2002. Along with its sister route, the slightly longer Trans-Siberian, the Trans-Mongolian is perhaps the ultimate train journey: 4,735 miles through six time-zones and across one fifth of the Earth’s surface. Two aspects of this journey correlate with business development.
- Not all trains are created equal. For anyone contemplating this trip, the critical thing to know is that the Chinese train is much more comfortable than the Russian train, with better food and a private bathroom infirst class. The same holds true for discovery platforms – not all platforms are equally easy to monetize outside of your core business and you need to study the cards you hold before you set your partnering goals and engage in partnering discussions. Platforms garner the most value when they are protected through foundational patents, broadly validated and potential partners do not have appropriate internal capabilities. The two biotech companies where I have worked both have excellent platforms – Trevena was founded by Bob Lefkowitz, a Nobel Prize winner, and is the leader in biased ligand signalling at GPCRs. Bicycle was founded by Sir Greg Winter and is the leader in bicyclic peptide (bicycle) therapeutics. At Bicycle, the Winter-Heinis patent is a foundational patent that gives us a monopoly on the phage display of bicyclic peptides. This positions us as the only company that can generate libraries of sufficient diversity to drive a robust hit rate for high affinity, selective bicycle If a company is interested in bicyclic peptides then effectively, they need to work with us. This foundational IP combined with accumulated expertise in our platform was critical to our deals with both Bioverativ in haematology and AstraZeneca in respiratory and cardio-metabolic disease. Trevena’s platform is primarily protected through trade secrets which can create a challenge when establishing research collaborations since potential partners like to understand what the secret sauce is before they agree to buy it. At Trevena, we focused our business development strategy on partnering programs rather than our platform since we were able to protect the value here through patents rather than trade secrets. This added a few extra miles to the journey – Trans-Siberian vs. Trans-Mongolian – but brought additional return.
- Find the value. During the first three days of the Trans-Mongolian, you can’t see the forest for the trees. Literally. As far as I can tell, a single silver birch forest stretches for 3,244 miles. This is both mesmerizing and disconcerting, especially when combined with vodka. Once the train reaches Irkutsk, however, everything changes – Lake Baikal, the Mongolian desert and the Great Wall of China are just three of the highlights. Unless you’re my husband, you might want to think about flying to Irkutsk and starting the rail journey there. In discovery platforms, the value also tends to be concentrated. The juiciest low hanging fruit is typically your core business. In Bicycle’s case, this is oncology where we are currently funded to deliver three assets into the clinic. With a broad platform, however, there will usually be other high value areas that the company is not resourced to deliver because the areas require specialist expertise or complimentary enabling technologies. At Bicycle, we continue to identify these other high value areas and they have become our focus for partnering. The deal with AstraZeneca was linked in part to early pharmacokinetic data showing that bicycles are bioavailable in the lung. This insight, combined with bicycles’ ability to disrupt protein-protein interactions, is an attractive proposition for a company that has the expertise and formulation capabilities to develop inhaled therapeutics. Our deal with Bioverativ capitalizes on the high success rate of the platform for haematology targets. Other areas where we are interested in leveraging the platform include CNS applications and inflammatory disease. What we have found is that being able to clearly articulate these areas of high potential value has been crucial to our success in partnering the platform where we have limited data. If you wait for other people to identify your value, you may be waiting a long time.
Darjeeling Himalayan Railway
Otherwise known as the Darjeeling toy train, this route in West Bengal runs for 50 miles from New Jalpaiguri to Darjeeling, the former British hill station. The route has a high point of 7,400 feet above sea level and climbs steeply through several fascinating reverses and loops. The train also passes over nearly 500 bridges in a journey that takes over seven hours. I sadly had to read about rather than experience these statistics as my toy train managed only two miles through the outskirts of Darjeeling on its way down the mountain before it derailed in a somewhat exciting manner. We were assured that a mechanical team was on its way and decided to wait it out. About 45 minutes later, two individuals arrived on a pump action handcar (think Great St Trinian’s Trian Robbery) with a single wooden crowbar. The laws of physics – a train is heavier than a wooden lever – prevailed and we walked back to town and caught a bus which took us to the valley in just three hours.
For me, the business development equivalent of the Darjeeling Toy Train can be the Material Transfer Agreement or MTA. In my experience, MTAs require caution. They sound good – the other company is sufficiently engaged to incur expense and allocate resources – but you may not reach your expected destination. MTAs make sense when you are opening a high value area with a clear route to funding or if you have candidate molecules and the potential partner simply wants to reproduce some of your data. But if you are working with unoptimized compounds and assays – which is typically the case if the technology is being exposed to a new therapeutic area – then the probability of generating compelling, non-ambiguous data is likely to be low.
A second lesson that the beautiful Darjeeling Himalayan Railway teaches is that because something looks good doesn’t mean that it’s the most efficient way to get from A to B. In an early stage company, getting that first validating deal can feel like a big success for about the time it takes to eat the appetizer at the deal dinner. Then reality sets in. The upfront is spent and a large portion of your workforce is now working on programs for which the value has mostly been sold. At Bicycle, we have focused our early partnering outside of our core oncology business and have allowed these partners to take control at an early stage. This maximises value by fully leveraging the capabilities of the partner organization. For non-core collaborations, I believe that this makes sense since the collaboration, while important, should minimally distract most of the workforce. The opposite is true in core collaborations where control (at least through early development) enables the biotech to maintain speed and efficiency within the parameters of the partnership while continuing to build capabilities that synergize with other unpartnered programs within the core area.
Japan is one of the best countries in the world to travel efficiently by train. It is home to 45 of the 51 busiest train stations in the world. Shinjuku station is the busiest of them all: the equivalent of every resident in the State of Connecticut passes through Shinjuku every day. Compare this to Grand Central which boasts more than twice the number of platforms but handles fewer than one third the number of passengers. Japanese railways are also among the most punctual in the world. The average delay on the Tokaido Shinkansen in 2012 was only 36 seconds. The driver completes a form if the train is more than one minute late. In 2004, I bought a Japan Rail pass on my honeymoon (I did say that my vacations were esoteric) and enjoyed the Japanese rail system for myself. My husband tagged along for the ride.
In addition to the comfort, speed and reliability of the Japanese train network, the reason that rail transport is so popular is that you can get to all the places you want to go. Around 17,000 miles of railway criss-crosses the nation (enough to cross the United States six times). And in this, I draw a parallel to successful business development. The strength of your team’s network is critical to your ability to get where you want to go. This is especially true for platform deals where the data has not yet been generated and may never be generated without a collaboration: in addition to selling the technology, you are selling the team. Existing relationships and the trust that this brings are part of the product. To be successful here, the strength of your networks needs to be matched by their breadth, reaching outside of your core therapeutic area. This means getting your board members and advisers involved, as well as your employees.
From Trains to Bicycles
At Bicycle, we have a robust and efficient drug discovery platform with much broader potential than we could possibly use internally. Finding ways to leverage this value through partnerships has been a key component of our strategy. The principles that underpin our success in executing transactions outside of our core therapeutic area are:
- Laying the right track: foundational IP backed up by robust validation
- Picking the best journey: proactively identifying and packaging high value areas to attract partners
- Keeping our eyes on the route: avoiding resource distraction for non-core deals; and
- Building and leveraging strong networks
And if you want to avoid traffic, but still can’t face commuter rail, try bicycling to work.
With thanks to Kevin Lee, Daniel Mansuri and Jonathan Schur for reading drafts of this blog post.