Future healing

The unique properties of domain antibodies open up many exciting possibilities for treating disease. 3i worked with drug discovery company Domantis to prioritise the wealth of opportunities and build a strong product pipeline.

New horizons for human health
In the search for new ways to protect and extend human life, antibody therapies offer great hope. Occurring naturally in the body, antibodies neutralise invaders through 'lock and key' actions that precisely target specific threats. By harnessing the power of antibodies in new forms, scientists can create highly-effective therapies that relieve a broad spectrum of conditions including arthritis, asthma and cancer.

Some of the leading research in the field has been carried out at the University of Cambridge, in partnership with the UK's Medical Research Council. Emerging from this pioneering work, robust platforms have been created for two strains of antibody therapies:

• monoclonal antibodies - targeting a single invasive body (or antigen); and
• domain antibodies - which can be engineered into molecules that have the flexibility to target one or more antigens

From research to application
The intellectual property generated by the research was ultimately split between two companies: Cambridge Antibody Technologies (CAT) gained the right to develop therapies based on monoclonal antibodies, while Domantis acquired the intellectual property for domain antibodies. The two companies then faced the challenge of turning groundbreaking research into commercially-viable applications. As a close associate of the Cambridge scientific community, 3i was well-placed to help.

Nigel Pitchford, partner in 3i’s Venture Capital team, explains: “From an early stage, we were tremendously excited by the potential for life-changing new treatments. We were the only venture investor in CAT and remained a shareholder for many years after it floated on the LSE. CAT ultimately succeeded in originating the first UK biotech blockbuster drug in the form of Humira. By 2004, Domantis was also ready to seek a major venture capital partner and 3i was the natural choice: we were close to the innovators, the history and the markets, and we had great belief in the technology.”

Developing a focused strategy
3i led two funding rounds for Domantis, helping the company to secure $33m in 2004 and a further $29m in 2005. Robert Connelly was the founding Chief Executive Officer and worked closely with 3i. In his words: “At the time of 3i’s first investment, Domantis was at a transition point – we’d proven the underlying power of our proposition but we needed to move from exploration to application: prioritising product creation and identifying long-term ways to create value. 3i played a key part in helping us finalise our plans.” An important element of the strategy involved strengthening the company’s management presence in the US, recognising that a NASDAQ listing might be a key path to value creation. Towards this goal, 3i helped the company to recruit well-known biotech leader Mark Skaletsky as its new chairman, followed by a series of strategic Board appointments that gave Domantis the American profile it needed.

Generating revenue
At the same time, 3i worked with the company to implement a twin-track approach to revenue generation. In the short term, Domantis generated income as a research partner for a series of global pharma giants, including Bristol-Myers Squibb. Therapies based on domain antibodies are hugely attractive to pharma companies, because the antibodies are uniquely small and flexible, opening up new possibilities for the way treatments are stored, administered and targeted. In parallel, Domantis’s creative and entrepreneurial team prioritised and developed a pipeline of therapeutic products that could be brought to the market following proof-of-concept clinical testing in man. By the end of 2006, the product pipeline was well advanced: around 13 drugs were at varying stages of evolution, with human testing expected to start in 2007 and market launches in 2012. An attractive prize It was at this stage that interest in Domantis’s unique capabilities became increasingly strong.

Following interest from a number of potential acquirers, GlaxoSmithKline (GSK) purchased Domantis in January 2007, in a deal that valued the company at $454m. For GSK, the purchase secured worldwide rights to highly-prized intellectual property. For 3i, the deal generated an IRR of 100% and saw another successful
partnership complete the journey from earlystage funding to true global leadership.