It is 20 years since Polyphor was founded. Today the company is developing its own medicines, but it all began quite differently ...
Michael Altorfer: Daniel and Jean-Pierre Obrecht founded Polyphor in 1996 as a service provider supporting research projects of companies in the pharmaceutical, agrochemical and cosmetics industries. The two brothers started in a laboratory on the University of Zürich campus and offered services in the field of contract research that involved optimizing interesting substances for their desired biological effect. That was a genuinely new approach at the time, because companies did not normally disclose projects to outside companies in the early phases of research for confidentiality reasons. The founders nevertheless managed to establish the necessary level of trust and - thanks to the high quality and reliability they offered - to collaborate with the big players in the industry, such as Novartis and Roche, as well as pharmaceutical companies in Europe, the USA and Japan.
When did Polyphor begin to work with macrocycles?
After Polyphor had established the service side of the business and began to make a profit, the company built up its own research operation. In 2001 the company started raising substantial funds through financing rounds to reinforce and accelerate this research activity. Polyphor developed a technology platform with the aim of establishing a new class drugs, namely macrocycles. I had already worked on macrocyclic compounds at Sandoz and during my PhD thesis work at Roche, so in 2001 Polyphor represented an exciting opportunity for me to collaborate in the establishment of this class of compounds and medical applications derived from them. In the meantime, Polyphor has completely given up the original service side of the business in the field of small molecules. Today the company is focused entirely on the development of macrocyclic compounds both in its own research and development and in collaboration with pharmaceutical companies.
What makes these macrocycles so special?
Macrocycles are a very special class of drugs. These compounds complement the established classes of synthetically manufactured “small molecules”, such as Aspirin and the major biotechnologically produced biopharmaceuticals – one example of these would be Avastin. “Small molecules” are simple to manufacture synthetically and can often be taken in tablet form, whereas biopharmaceuticals show a high degree of selectivity and efficacy also with complex biological or molecular interactions. In contrast to small molecules, the manufacture of biopharmaceuticals is very complex and based on biotechnological processes in which the compound is produced by microorganisms.
The advantage of synthetically manufactured macrocycles is that they combine the strengths of the two established drug classes in one and enable new treatment options to be developed for which the established drug classes offer no satisfactory therapy, if any at all. Polyphor is using its technology platform in two ways: to build up its own product portfolio and to collaborate with big pharmaceutical companies. Companies such as Novartis, Boehringer Ingelheim, Taisho in Japan and, in the last few weeks, also Gilead in California have recognized the potential of macrocycles and are exploiting the advantages of a partnership with Polyphor to develop novel medicines. These pharmaceutical companies also benefit from the fact that Polyphor has established strong protection through its patents. Both the production of macrocycles and the specific action of the drug candidates are patent protected.
So Polyphor planned to develop its own products from the outset?
That’s correct. With the establishment of the macrocycle technology platform, the objective of Polyphor from the outset was to use macrocycles as new active pharmaceutical ingredients. But first of all the technology platform had to be built up and validated, so that the discovery and development of macrocycles could be used efficiently and on an industrial scale. It was only through the capacity to produce macrocycles efficiently and optimize their properties in iterative processes that were we able to test the application of the platform in different therapeutic areas and develop our own macrocyclic medicines. The discovery and development of new antibiotics and other uses in the field of pulmonary diseases and oncology showed that macrocycles can meet a variety of medical needs and even lead to the discovery of completely new mechanisms of action. The success of our own research was supplemented by other projects in which we were also able to demonstrate the use of macrocycles in collaboration with pharmaceutical partners. In the meantime we are in the midst of a transformation from a technology company to a products company.
What products does Polyphor have in its portfolio today?
At present, there are three drug candidates in clinical development. The one at the most advanced stage is a very potent antibiotic for Pseudomonas bacteria. Antibiotic resistance is one of the biggest challenges facing hospital medicine today. It is almost 40 years since any new antibiotics were discovered and developed for Pseudomonas bacteria, and certain bacteria have made use of this time and developed resistance to all established classes antibiotic. With our drug candidate POL7080 – also called murepavadin – Polyphor has succeeded in developing an antibiotic with a completely new mechanism of action. This new mechanism of action enables POL7080 to kill resistant Pseudomonas bacteria. Murepavadin is the first of a new generation of antibiotics. In addition to POL7080, Polyphor has already identified further representatives of this new antibiotic class that can kill a broad spectrum of dangerous resistant bacteria. I’d like to emphasize here the good collaboration with Professor John Robinson at the University of Zurich and the very important support we received for a number of years from the Commission for Technology and Innovation (CTI), which provided substantial funding for the development of this new class of antibiotics. Our second drug candidate, POL6326 – or balixafortide – is being used for combination therapy in oncology. The aim of the ongoing trial in breast cancer patients is to show that the effect of chemotherapy can be improved by additional treatment with balixafortide. And lastly we are developing POL6014 for the treatment of chronic pulmonary diseases. This product is inhaled and acts on an enzyme that destroys the lung tissue when it is present in excess. We are testing its first use in humans with cystic fibrosis. What all these indications have in common is that there is an exceptionally high need for novel, effective medicines capable of treating these diseases.
The macrocyclic compounds seem to be suitable for use in many different therapeutic areas.
We have shown not only through our own research work, but also in collaboration with pharmaceutical companies that the class of macrocyclic compounds can indeed be successfully used in many therapeutic areas. As a small pharmaceutical company, we are focusing on selected uses, especially in the field of antibiotics and rare pulmonary diseases. Our objective here is to offer either completely new or much improved treatment options. Here we are concentrating on the development of new macrocyclic compounds for the treatment of acute diseases in hospital or rare life-threatening diseases.
In March 2016, Polyphor concluded an agreement with the patient organization Cystic Fibrosis Foundation Therapeutics (CFFT) worth 3 million dollars for the development of POL6014. What kind of collaboration is it?
The collaboration with CFFT enables us to accelerate the clinical development of POL6014 and also facilitates the relevant clinical trials in humans suffering from cystic fibrosis. The CFFT is one of the largest and best-known patient organizations and is ideally networked. Patient organizations are increasingly taking on the role of development partners and investors, especially in the field of rare diseases. Thanks to their access to top scientists and opinion leaders, their influence and their reputation, they negotiate with pharmaceutical companies on an equal footing. The agreements are preceded always by extensive scientific and medical investigations. A partnership of this kind therefore is therefore tantamount to independent endorsement of a therapeutic approach. Contracts with patient organizations are now also structured rather like licence agreements with pharmaceutical companies and include, for example, clearly defined milestones that trigger a payment when each milestone is reached. We have already reached the first two milestones in our agreement with the CFFT. The collaboration with patient organizations is especially important to us, and we absolutely delighted with the support, whether in the form of funding, good advice, access to networks or other things – including in particular the constant motivation to deliver a possible contribution towards the relief or cure of serious diseases.
You are mainly financed privately and have only a few classical venture capitalists such as venture funds among your shareholders – is that a success model?
I think there are two essential aspects that have led to this shareholder structure: the history of the company and the fact that Polyphor is developing a relatively broad-based portfolio of drug candidates and not putting all its eggs in one basket. Polyphor started as a service provider, then built its own technology platform and is now focused on the macrocyclic compounds that have emerged from the technology platform. For most of these classical venture funds, the establishment of a services company or technology platform was not attractive enough – they prefer to invest in companies that are developing a specific medicine. But it was precisely the fact that Polyphor does not put all its eggs in one basket which convinced many of our investors. So the shareholder base of Polyphor includes a large number of private investors who have also built up a successful company themselves and are persuaded by the development of Polyphor. Since Polyphor was founded, the company has earned around 150 million francs in operating income, and more than 180 million francs has flowed into the company through capital increases. We invested these funds first in building our technology and then, over the last few years, mainly in our product pipeline.
The story of Polyphor began in 1996 in Zurich. Why did the company move to Allschwil?
Quite simple: Polyphor had a problem with space in Zurich, because the company developed so well that it became rather cramped. It was clear that there was only one destination for a move, and that was the biggest life sciences cluster in Europe! There is probably nowhere else where you will find so much pharma expertise in such a small area - and not only at Novartis and Roche. Here we can find the highly qualified scientists and specialists that we need for the development of our company. Also thanks to the high quality of life in the Basel region it is relatively easy to attract scientists here from all over the world. And something else that should not be underestimated is the efficiency and competence of the Basel authorities. They know the industry, understand our needs and offer a hand in finding pragmatic solutions.
Are Novartis and Roche not also competitors for personnel and know-how?
There are good reasons why someone wants to work for a big company. But we have found that, as a small company, Polyphor is attractive for many people who appreciate the advantages of a smaller organization. The work of an individual is much more visible, the tasks more varied and the responsibility often more comprehensive. All the employees know each other; there is a family atmosphere, and many people have experienced and shared in the establishment and transformation of Polyphor over a long period. The opportunity to collaborate in the development of new medicines and exploiting the specific advantages of macrocyclic compounds fascinated a lot of the scientists. With their vision and history, the collegiate atmosphere and the flat hierarchies, Polyphor has become an attractive employer.
How do you see the future for the life sciences region of Basel?
Basel can never have too many innovative companies! For this reason, I believe strong inward investment is very important. It’s like with car sharing: the more people who get involved, the more attractive the whole system becomes. And the more people who work in the life sciences cluster of Basel, the more specialists will come to the region and the more intensive the exchange of knowledge and contacts will be. As long as the region manages to keep attracting talents with their innovative ideas and filling them with enthusiasm for Basel, it will remain a leading location. I’m very confident of that!
Michael Altorfer has worked for Polyphor since 2001. After various management functions, he took over as CEO at the end of March 2015. Born in Zurich, he studied Chemistry, Toxicology and Immunology at the Federal Institute of Technology (ETH) in Zurich and gained his PhD at the University of Zurich.
Michael Altorfer began his career as a scientist in pharmaceutical research at Sandoz in Basel, then later at Ciba-Geigy in Summit/NJ (USA) and – back in Basel – at Roche. In 1996 he switched to investment banking with UBS Warburg. In 2000, he gained an MBA at the University of Rochester/NY (USA).