In drug development, the typical trajectory for a small biotech company is to develop a drug, then find a big-pharma partner to help fund trials and get the drug onto the market if it gets approved.
But a partnership announced today is bucking that trend.
Japan’s Takeda Pharmaceuticals is teaming up with New York-based biotech company Ovid Therapeutics to co-develop TAK-935, a drug meant to treat rare epilepsy disorders in children.
The difference with this arrangement is that the drug in question comes from the pharma giant, Takeda, not the biotech. Ovid, which privately held, has an expertise in rare neurological conditions that it says can help Takeda get the drug through development.
The partnership, announced Wednesday, has been ramping up for almost two months, with Ovid and Takeda splitting the development work 50-50. Ovid will also be expanding up to Cambridge, Massachusetts, in part to be closer to Takeda’s team there. Beyond outlining the logistics of the partnership, the financial terms of the agreement weren’t disclosed.
Dr. Jeremy Levin, Ovid’s CEO, told Business Insider that this was the first time he’d seen an arrangement like this in the industry. Before joining Ovid, Levin was CEO of Teva Pharmaceuticals and an executive at Bristol-Myers Squibb.
That Takeda agreed to the setup announced Wednesday, Levin hypothesized, could have something to do with big pharma companies re-thinking how they do research and development to get better returns by turning to smaller companies that might have more expertise in a certain area.
It’s something that the industry as a whole could benefit from: According to a report released last month by Deloitte, research and develop returns for big pharmaceutical companies are declining, down in 2016 to 3.7% from 10.1% back in 2010, and, as the report noted, getting bigger might not be the best solution.
Ovid’s focus is on rare neurological diseases, and the company also has a drug that’s in phase 2 trials for a genetic condition called Angelman Syndrome that affects the nervous system and leads to developmental delays, trouble moving, and difficulty sleeping. The company picked up a drug called gaboxadol, which was originally studied as a sleep drug.
Ovid and Takeda aren’t the only companies hoping to better treat rare pediatric epileptic disorders. GW Pharmaceuticals, which now goes by Greenwich Biosciences in the US, is working with a drug derived from marijuana to treat Lennox-Gastaut syndrome, Dravet syndrome, and tuberous sclerosis complex, the areas where Ovid and Takeda are starting as well now that the drug has shown it’s safe based on Phase 1 trials.
Treating rare forms of epilepsy
The drug, TAK-935, works by inhibiting the enzyme that’s responsible for breaking down cholesterol in the brain. The hope is that by blocking that enzyme, the neurotransmitter glutamate won’t get over-activated, which is something that’s connected to seizures.
Yaron Werber, Ovid’s chief business and financial officer, told Business Insider that part of the reason Ovid was interested in working with Takeda on the drug was because of the biomarkers associated with how it works in the body. The drug gives off signals as it’s metabolized, so the researchers studying the drug can know if it’s actually getting put to use in patients.
While that may seem straightforward, having biomarkers and understanding pathways is a relatively new concept in neurology. Levin said that the science that’s helping them out owes a lot to the work that’s been done with cancer.
“A lot of the work in oncology at the same time led to a deep understanding of neurology,” especially when it comes to biomarkers and diagnostic tests to measure them, he said. That might be true of a lot of different areas outside of oncology, he said, but in particular neurology is going to be one of the first to benefit.
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