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| Protez Pharmaceuticals' work to fight antibiotic-resistant bacteria is so successful that pharma giant Novartis recently purchased the company for up to $400 million. |
With their short life cycles and incredible adaptability, bacteria are evolving to be stronger, more dangerous and more resistant to traditional antibiotics than ever before. In fact, antibiotic resistance has been identified as one of the world's most pressing health problems.
The Centers for Disease Control and Prevention estimate that 2 million people in the United States contract hospital-acquired infections each year, resulting in 90,000 deaths. In Europe, the infection rate has been estimated at 3 million people and 50,000 deaths.
Protez Pharmaceuticals of Malvern, Delaware County, is meeting that challenge with such success that pharma giant Novartis recently purchased the 5-year-old company for up to $400 million. The total amount is based on Protez achieving certain clinical milestones, regulatory approvals and commercial targets.
Protez's keystone product is PZ-601, an injectable antibiotic in the class of agents known as carbapenems. PZ-601 is expected to be particularly effective in therapy for hospital patients dealing with difficult to treat, life-threatening bacterial infections such as MRSA (methicillin-resistant staphylococcus aureus). Protez recently commenced Phase II testing of PZ-601 in up to 100 patients with complex skin infections.
"PZ-601 is a pretty hard-hitting compound, has a broad spectrum of bugs it does kill and is effective in combination with other drugs," says Dave Sinkway, director of finance and administration for Protez.
Timely Investment Paves the Way for Success
Protez credits timely financial investment by Ben Franklin Technology Partners (BFTP) for paving the way for the company's current success. BFTP provided $300,000 in early-stage funding as Protez's founders were advancing their initial research programs, negotiating successfully to acquire the North American and European distribution rights to the PZ-601 compound from Sumitomo Pharmaceuticals Co. Ltd. of Japan and moving toward raising a second round of venture capital.
"It was critical," Sinkway says. "BFTP funding really set the stage for us to acquire that compound and the next-stage funding." Protez was truly a success of the regional entrepreneurial community, receiving co-investments and support from BioAdvance, Mid-Atlantic Angel Group, Robin Hood Ventures, Quaker BioVentures, SR One Ltd, Birchmere Investors and others.
A Strong Team—and
Good Communication
According to Sinkway, who has served in similar positions with startups since 1988, one area of particular success for Protez--and the lesson for other entrepreneurial endeavors--was in finding and bringing together top-notch employees, business and technical advisors, investors and directors, and creating an environment in which everyone was motivated and challenged to achieve maximum results.
"As a high-tech startup, you don't have a lot of time. You're burning a lot of cash, and you'd better be able to deliver and/or respond to any setbacks," he says. "One of the things that we've done well at Protez is to communicate positively with each other, facing all issues quickly and effectively. Our senior management team also did a tremendous job communicating externally with the pharmaceutical industry, telling our story and maximizing Protez's visibility."
Still Together after the Acquisition
Protez was founded in 2003 by Klaus M. Esser, Luigi Xerri and Christopher Cashman, who still serves as president. The founders negotiated for the compound rights with Dainippon Sumitomo Pharma Co., Ltd. of Japan and develop and commercialize PZ-601 in North America and Europe. Much of the preliminary testing was done in Europe. In May 2008, Protez began a 100-patient Phase II study in patients with complicated skin and skin structure infections.
"The objective we had was for [Protez] to push our product through Phase II testing and then go out to market to pursue potential acquirors," says Sinkway. "Prior to Phase II and achieving clinical proof of concept, most large pharma companies don't want to look at you. The timing of this acquisition is a real coup for Protez and a validation of the need for products in this therapy area."
"The other great thing is that we are all still here," he concluded, referring to the fact that Protez will remain a standalone subsidiary of Novartis in Pennsylvania. "The team will stay together and continue to work toward bringing PZ-601 to market. The investors made out well--it's a happy ending all around." |
