BioWorld International Correspondent

Merus BV, which is developing a novel antibody platform, raised €21.7 million (US$30.3 million) in a Series B round and entered a license option agreement with Novartis AG potentially worth more than $200 million in up-front and milestone payments.

The company, based in Utrecht, the Netherlands, has its roots in Leiden, the Netherlands-based Crucell NV. Its core Oligoclonics technology was conceived by company co-founder and CEO Ton Logtenberg, while he was chief scientific officer at the larger firm.

"Technologically it's surprisingly simple to do this," he told BioWorld International. Crucell retains a small stake in Merus, but the latter owns the technology outright.

The platform enables the company to produce mixtures of between three and five recombinant antibodies from a single clonal cell line.

Given the complexity associated with characterizing antibodies, it currently is focusing on the simultaneous production of three molecules.

The antibodies produced from such a cell line have differing binding specificities but are not truly polyclonal. Each shares a common variable light chain (VL), but each has a distinct variable heavy chain (VH). That approach avoids VH-VL mispairing, the company said, but still enables the production of a large, diverse repertoire of high-affinity antibodies. The company has published proof-of-concept data using an antibody repertoire raised against tetanus toxoid.

Although the company was formed in June 2003, it has focused primarily on building out its platform and its regulatory strategy.

In addition to Oligoclonics, it has developed a method for raising bispecific antibodies and a transgenic mouse for the production of human antibodies.

It also has developed supporting analytical tools needed to characterize its production process. "The challenge there is to show the ratio between the different antibodies remains constant over the course of production," Logtenberg said.

It is using native mass spectrometry to characterize the finished product. "We're getting advice from the EMEA [European Medicines Agency], and that has been very helpful in developing the right assays to show consistency," Logtenberg said.

Cocktails of antibodies are seen as broadly promising across several areas of medicine because they can offer mechanisms, such as complement activation, because of their potentially greater selectivity and their extraordinarily high affinities.

"It's not a secret anymore that these combinations are very potent," Logtenberg said.

The cost of goods associated with Oligoclonics-derived antibodies will be "roughly equal to those for a monoclonal antibody," he said. "If the potency goes up, then the amount of product needed for a particular treatment could be much lower."

Details of the agreement with Novartis, of Basel, Switzerland, were not disclosed, but it involves a preclinical oncology program, which Merus will continue to work on in-house. "It's an option to a license," Logtenberg said. "The definitive license will be signed later on, if they like what we're doing."

The deal also involves an equity component – Novartis participated in the financing via its Option Fund. The global financial crisis delayed the overall fundraising process, but Logtenberg is satisfied with its conclusion. "What speaks for itself is the quality of the investors," he said.

Other new investors include Pfizer Inc., of New York; San Francisco-based Bay City Capital; and Life Sciences Partners, of Amsterdam, the Netherlands. Seed investor Aglaia Oncology Fund, of Bilthoven, the Netherlands, also participated.

Published  February 3, 2010