CAT got the cream but it almost turned sour
The inside story of Cambridge Antibody Technology’s often turbulent journey from biotech baby to drug discovery blockbuster – as told by former CAT executive David Glover in extracts from his recently published memoir, ‘Vie D’Or’. Tony Quested reports.
Cambridge Antibody Technology – affectionately known as CAT – was the architect of the cluster’s first blockbuster drug and had become a ‘must buy’ business by the time it was acquired by pharmaceutical giant AstraZeneca for £702 million in 2006.
CAT’s core focus was on antibody therapeutics, primarily using phage display and ribosome display technology, and its IP was used to create adalimumab, the first fully human antibody blockbuster drug. Humira, the brand name of adalimumab, is an anti-TNF antibody discovered by CAT as D2E7, then developed in the clinic and marketed by Abbott Laboratories.
CAT was also behind belimumab, the anti-BlyS antibody drug marketed as Benlysta and the first new approved drug for systemic lupus in more than 50 years.
While the AZ acquisition put CAT’s executives on Cloud Nine, theirs was a bumpy runway and an often turbulent ride before the business finally took off.
David Glover joined CAT in November 1994 when it was still a corporate kitten, taking the role of Vice-President, Medical. He joined from Schering-Plough. “Monoclonal antibodies were something I had been keeping an eye on for some time,” he recalls.
While he was initially concerned by CAT’s lack of a CEO, Dr Glover says he was “really excited at the prospect of joining an exciting UK biotechnology company that had strong backing and support from the MRC and the Laboratory of Molecular Biology at Cambridge.”
Dr Glover confesses to a nagging doubt before finally putting pen to paper. He’d had a previous job offer from Pfizer, but says: “This was rather different to the Pfizer offer situation. It was certainly more risky as there was no certainty that the novel antibody technology would work. Monoclonal antibodies had a number of significant issues that needed to be addressed if they were to fulfil their promise as ’magic bullets’.
“Their recent track record had been disastrous with a number of high profile clinical trial failures. CAT had sufficient cash for the immediate future, but would need to address that situation soon otherwise the company would have to drastically reduce its operations.
“I had plenty of confidence in my own ability to make a success of the new job. It didn’t frighten me that I would be the only medic surrounded by over 20 molecular biologists, many with PhDs. I would effectively be in control of the company’s preclinical and clinical product development, starting from scratch. No more inheriting other peoples’ disastrous programmes. No more arguing with people in a US head office who didn’t really know what they were doing half the time and had less experience than me.”
CAT and mouse
Dr Glover writes that the failure of the early attempts at therapeutic monoclonal antibodies was because the antibodies were derived from mice, by immunising them with the antigen against which the desired antibody was required. When injected into man, the human immune system recognised the mouse antibody protein as ‘foreign’ and rejected it. That meant that the next time the particular murine antibody was injected into the same patient, their body rapidly neutralised and eliminated it, negating any potentially useful effects. “The HAMA reaction could itself be dangerous and even life threatening. The solution to the problem lay in making the antibody ‘human’ instead of ‘mouse’, Dr Glover says.
He writes: “The holy grail was to have fully human antibodies. For ethical reasons it was not possible to immunise humans and harvest their antibodies and then use these to treat another patient. Two possible routes were developed to get to the fully human molecules. The first was to modify the mouse such that some of the genes of its immune system were exchanged for the human equivalents. When immunised with the target antigen, the mouse would produce a human antibody instead of a murine antibody. These mice were therefore known as transgenic.
“The second route was the one that CAT had pioneered. It was completely different. Human antibody genes were extracted from white blood cells from donated blood or bone marrow. The human genes were then rearranged and inserted into the genes of a bacteriophage, a type of virus that is completely harmless to man. The host for the bacteriophage is a bacterium (E.Coli). As it contained the human antibody genes, the bacteriophage was tricked into expressing the human antibody protein on its surface.
“Huge repertoires, also known as libraries, of phage antibodies were built up, containing up to 100 million human antibodies in a drop of fluid the size of a teardrop. The final step was to use the antigen against which antibodies were required in a ‘selection’ process.
“The selection process was a bit like fishing. The antigen was the bait used to extract out of the library any antibodies that bound to it. Those that didn’t bind could be discarded, and those that did, could be sorted out with the aim of picking the best one.
“The CAT technique provided far more candidate antibodies than the transgenic mouse and the whole process could be achieved in a few days compared with several weeks for the mouse option. I was fascinated by it all and the possibilities that arose.”
Last of the summer ‘whine’
The way CAT was structured – Peptech had 40 per cent of the company so three seats on the board – allied to tensions in management meant a power struggle was soon underway. Focus on the core business strategy was lost in the fog and by the summer of 1995, CAT had almost run out of cash. Staff were told there would be no wine at the Christmas party and David recalls: “Morale, already low, sank further.”
Roger Aston was named as new CEO and David and other key figures knew Peptech was also running short of cash but wanted to float: “We were horrified about their listing plans, which included stating its 40 per cent holding in CAT as the key asset. Our vision was for CAT to list in its own right but we knew that we would have to reduce Peptech’s shareholding in CAT to be able to proceed.”
Peptech then made a formal merger proposal to CAT. Dr Glover was part of the due diligence process and says the Peptech pipeline “was uninspiring at best.”
A CAT board meeting, while stopping short of being a night of the long knives, rejected the merger proposal – partly thanks to crucial support from Sir Aaron Klug to “defend the scientific pedigree of CAT and not allow it to be diluted with the inferior Peptech R & D and pipeline.”
Peptech realised its best hope of raising funds was to sell some of its holding in CAT in whom there was considerable investor interest. 3i – previously unwilling to invest in CAT – stepped in to hoover up the holding and effectively put a stand-alone CAT in prime shape for a London listing. CAT gained no money from the share deal so still needed to raise some cash of its own, but that was a fight for another day.
Slowly but surely, Peptech’s hold on CAT was eroded. Its board representation was cut to two and Roger Aston was replaced as CEO by David Chiswell. Staff morale soared and CAT’s scientists were able to get back into the monoclonal groove as the directors sought the cash to steer through an IPO.
Dr Glover says that, with CAT down to its last few weeks of cash, a series of meetings were arranged with potential investors, mainly specialist biotech funds in the UK, Switzerland and the US. Major pharmaceutical companies were also targeted.
CAT had a proposed deal on the table, negotiated by David Chiswell, to licence the antibody library to Genentech from South San Francisco. “The dampener on the deal was that their final offer was only $2 million and for that they wanted a small equity stake in CAT of around two per cent in addition to the library.
“Despite serious misgivings that we might be enabling a competitor and selling too cheaply the deal was signed and thus we narrowly avoided running out of cash. I don’t think the staff knew how close we had come, but it didn’t matter. Later that year we did a similar licensing deal with Pfizer. This time the price was $5 million with no equity stake involved.”
More investors piled in, bringing the total raised to around £10 million in the summer of 1996. As that money came in, CAT appointed Cambridge maths graduate and career accountant John Aston as FD; he had previously worked with the British Technology Group and later been involved in a number of stock market flotations, including the privatisation of the water companies. “John gave us credibility in the City and he was absolutely necessary if we were going to float the company,” David writes.
Although the journey to market was lumpy, CAT finally made it to flotation in April 1997. With the help of Cazenove, CAT surpassed its £35m IPO target and raised over £40m in an exercise thought to have been six times oversubscribed. “One of the bigger investments came from a fund whose principal had dozed off during our presentation,” David writes, adding: “CAT had become a flagship company for the UK biotech sector.”
Less than two years after the 1997 flotation, CAT was doing a ‘Canned Heat’ and was on the road again. This time the target was to raise a further £90 million to fund the expansion of the product pipeline and increase the number of target antigens against which it could use the antibody library.
“By now the technology had advanced and our antibody library was even more powerful. Additional deals had been signed with pharmaceutical and biotechnology companies, which added validity to the claims we were making,” David writes.
He adds: “A backcloth of enormous turmoil in the markets, with wild swings in all biotech company share prices, raised real doubts whether we would be successful with the fundraising, but we scraped home, raising £93 million, selling shares at £18.50. The share price achieved was almost quadruple the price of two years previously.”
The pipeline Dr Glover and his team built at CAT is stuff of biotech legend and well chronicled elsewhere. Suffice to say it was down to David to devise and propose a preclinical package of data to support going into man. Not all the clinical trials went well, notably those involving CAT-152. Then along came Genzyme, which wanted to partner with CAT on anti-TGF-Beta programmes.
The deal was finally struck for both sides to pool their programmes and resources, excluding CAT-152, and share costs and profits 50:50, with Genzyme additionally investing $20m in CAT. David recalls: “Genzyme’s $20m bought them a one per cent stake in CAT. If they had concluded the deal a year earlier they would have got almost 10 per cent for the same investment, such had been the rise in CAT’s share price. These were heady days and the company was riding on the crest of the biotech wave.”
Deals and disputes seemed to ebb and flow at regular intervals; apart from fighting off a merger with Peptech and rejecting an overture from Human Genome Sciences, CAT had no strategy for merger or acquisition under either David Chiswell or Peter Chambre’s leadership.
Out of the blue CAT announced that it was going to merge with Oxford Glycosciences – a deal that was scuppered when Abbott hit CAT with a royalties bombshell and CAT’s share price nosedived, also cutting off an avenue to raising further cash. But CAT’s core human antibody technology was still coveted the world over and seeds sown by Dr Glover were to blossom into the AstraZeneca deal.
AZ had got into bed with CAT’s rival Abgenix in the US but David grasped the nettle and initiated a partnership deal with AstraZeneca.
In November 2004, AstraZeneca took a 19.9 per cent stake in CAT for a £75m cash injection. AZ got approximately 75 per cent of the company’s future R & D output, including most of the early stage pipeline. It was a logical development for AZ to eventually swallow the whole of the business.
David wanted CAT to diversify into vaccine design and development. The company had already completed a successful vaccine design project with Merck, and antibodies and vaccines went together well scientifically, he argued. But his carefully crafted strategy was shunned and wasn’t even put to the board. Disillusioned, but with no shortage of other offers, the inevitable happened: “It really was time for me to move on,” he says.
About the author
Dr David Glover was born and raised in Birmingham. Both parents were medical. He was a foundation scholar at King Edwards School, Edgbaston. He studied Natural Sciences (medicine) at Gonville and Caius College, Cambridge, where he was also a scholar. Following his undergraduate degree in pharmacology and comparative pathology he attended the clinical course at Birmingham University Medical School, before returning to Cambridge for Finals.
As a junior doctor he worked in Birmingham and Wolverhampton, passed the membership of the Royal College of Physicians and was appointed a clinical research fellow in the Birmingham university department of cardiovascular medicine.
Following a locum consultant position for the summer of 1983 he moved into the pharmaceutical industry as a clinical research physician at Merck, Sharp and Dohme, Hoddesdon. His involvement with clinical trials of ACE inhibitor drugs (enalapril and lisinopril), and later simvastatin established his industry credentials.
He then moved to be medical director at Kirby-Warrick (Schering-Plough) in Mildenhall. During this period he played a pivotal role in obtaining regulatory approval for Clarityn (loratadine), followed by several further successes. He was also honoray clinical assistant in cardiology at the National Heart Hospital and then Addenbrooke’s Hospital, Cambridge.
In 1994 he made the bold move into the biotechnology sector, being appointed as vice-president for medical development at Cambridge Antibody Technology. He was responsible for establishing product development capabilities and for taking the company’s product candidates into man. He also played a key role in the company’s successful flotation on the main London Stock Exchange in 1997 and subsequent fundraising. He was appointed to the main board as chief medical officer and executive director in 1997.
He initiated the discussions that led to the successful deals with Genzyme and AstraZeneca (AZ), in all helping raise over $250 million for the company during his tenure. Following the AZ deal in late 2004, he stepped down from the board and took early retirement in 2005. Subsequently he was a non-executive director and chairman at a small number of small biotechnology companies whilst consulting for a wide variety of companies and institutions.
In 2006 he played a leading role in the aftermath of TGN1412 (‘the clinical trial that went wrong’), by helping develop improved guidelines for early stage trials of biological drugs.
Vie D’or is David’s professional memoirs. It is not an autobiography, rather the story of one man’s journey through medicine and medicines, recalling some of the people, the products and events that enriched his career.
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• PHOTOGRAPH: The CAT management team at flotation in April 1997 (from left) David Chiswell, Jason Avery, Kevin Johnson, David Glover and John Aston