Next year Seattle will have a new publicly traded biotechnology company, Aptevo Therapeutics, with four products on the market — a lot more than most local biotechs can claim.
Next year Seattle will have a new publicly traded biotechnology company with four products on the market — a lot more than most local biotechs can claim.
They won’t be big products, and it won’t be a big company, but it underscores the region’s core biotech strengths in immunology and cancer research.
The company’s debut also will close a loop that began almost a decade ago, when Seattle biotech company Trubion went public, then struggled and was sold in 2010.
Aptevo Therapeutics, to be spun off in mid-2016 by Maryland-based Emergent Biosolutions, has a product candidate for prostate cancer in Phase 1 clinical trials.
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Trubion’s technology lies at Aptevo’s core, but that was “two generations ago in its design,” said Daniel Abdun-Nabi, Emergent’s president and CEO. “We’ve seen significant improvements in the way molecules are being designed and built.”
Aptevo will have 70 to 90 Seattle employees focused on research and development, he said. It will stay in its current location in Belltown. Its total workforce will be about 130 when commercial-sales employees in Pennsylvania and elsewhere are included.
The Seattle company will have annual sales of $30 million to $40 million at the outset, from four products “not related at all” to its core technology, Abdun-Nabi said.
“It’s not a ton of revenues but it provides a healthy cash flow to help offset the R&D costs,” he said.
The spinoff logic is that Emergent, with a current market value of $1.5 billion, sells an anthrax vaccine and other products for what it calls the “biodefense and emerging infectious diseases fields.”
Aptevo, by contrast, is an R&D company in the cancer field, meaning it will consume lots of capital in the coming years. Wall Street has shown a strong appetite for some companies in the immuno-oncology sector — as local mainstays Seattle Genetics and Juno Therapeutics demonstrate — so the “pure-play” spinoff may attract investors who previously weren’t interested.
Leading the Aptevo spinoff will be Marvin White, an Emergent director, whose résumé includes positions as a hospital system’s chief financial officer and as CFO and executive director of Lilly USA.
Abdun-Nabi said White, though he comes from a large pharma background rather than an early-stage company, is familiar with commercialization. He “understands how to do deals — he understands how to partner,” Abdun-Nabi said, so Aptevo can line up collaboration deals and “is not doing it all on its own nickel.”
Aptevo’s Adaptir technology, says Abdun-Nabi, uses “bispecific” molecules to attack cancer cells. One end is designed “to trigger the T-cells within the body, specific killer cells”; the other end is tailored to latch on to a specific type of cancer cell. The result is “a very targeted therapy.”
The separation plan still requires Internal Revenue Service approval for the tax-free distribution of stock in the new company, and final approval by the Emergent board.