The Finnish biotechnology company Herantis Pharma runs two clinical development programs, one of which is the gene therapy candidate Lymphactin to treat breast cancer-related lymphedema that is in phase II studies, and the drug candidate CDNF, a protein with potential for the treatment of Parkinson's disease and other neurodegenerative indications.
The company's project portfolio, not least its Parkinson's candidate, which is currently undergoing a phase I/II study involving 18 patients at three clinics in Sweden and Finland, has attracted the attention of the major Swedish fund player with strong preclinical data and a favorable safety profile. Swedbank Roburs interest.
Mattias Haggblom is portfolio manager for Robur's health fund Medica, which acted lead investors in the directed issue.
Herantis Pharma raised 5,8 million euros in the issue where you are the lead investor, can you briefly explain what that means – how large a share of the issue did you take, for example?
– We came in early in the process and indicated that we were interested in participating with half of the issue. We are happy to act as anchors in these issues but are reluctant to invest ourselves, so we took half of that and other qualified investors participated with the remaining amount.
The capital will finance phase II and phase III studies with Heranti's candidates. Phase III normally involves large studies, many patients and thus significantly higher costs - so not in this case?
– We will not be responsible for the company's exact plans, but our ambition is to support further development of the ongoing studies, which in turn will give us guidance on further studies. Regarding the ongoing phase I/II study in Parkinson's, we expect to have data by the end of the year. Although it is a phase II study, it is limited in the number of patients, but it includes both placebo control and two different dose groups. We believe that the study can be very informative for the next step.
The medical need in Parkinson's, Alzheimer's and other neurodegenerative indications is great. At the same time, it is a difficult area, as Biogen and Eisai's phase III flop in Alzheimer's is a highly topical example of. What indicates that Herantis will succeed where others have failed?
– Firstly, the disease picture in Parkinson's is much better understood than, for example, in Alzheimer's, where I suspect a polarization between the researchers where one half believes in the amyloid beta hypothesis and the other half thinks it is time to leave it and move on. In Parkinson's, we know that dopamine-producing cells and the loss of these are the cause behind the disease. This means that the path forward for disease-modifying therapies, i.e. therapies that change the course of the disease and do not just constitute symptomatic treatment such as levodopa, is easier – although far from "simple".
– Also note that one of the most respected research companies, Roche, now has many late-stage neurological projects in the pipeline. Not because they want to take a chance, but because there is a better understanding of the disease picture in many indications. Their mantra ”follow the science” has taken the company into Alzheimer's, SMA (spinal muscular atrophy), MS (multiple sclerosis) and Huntington's disease, to name a few indications.
Herantis Pharma also has a gene therapy candidate in the pipeline, a field that, judging by several recent major acquisitions, is hot among the major players. How much of a role did that play in your decision to join the company?
– Our work so far has been entirely focused on CDNF and Parkinson's. Some tell me that the gene therapy candidate is at least as exciting. For me, it's all about the upside.
Leaving Herantis aside for a moment: When we met you in London at the LSX World Congress in early February, you commented that the high M&A activity we saw in the US at the beginning of the year was similar to the start of 2018, which turned out to be a fairly mediocre year in terms of acquisitions and major deals. What is your forecast for 2019 now, based on what has happened since then?
– Every year is believed to be the big M&A year. And no matter how the year starts, it often ends the same way. The underlying need for Big Pharma to fill its pipelines with new innovative projects is constant and is not affected to the same extent by tax reforms in the US or interest rates as some analysts would like to believe.
Finally, you mentioned in the same interview that you had some meetings with a number of smaller companies planned. Herantis Pharma also presented at LSX… was that where it “clicked” or have you been following the company for longer than that?
– It actually started with a meeting in December in Stockholm that was about to be cancelled due to a misunderstanding about a meeting address. I am glad that the meeting took place. The initial meeting attracted me to do a deep dive into published material, which includes a publication in Nature, plus further meetings with the company, conversations with leading researchers in the field and putting the company in context with what is happening right now in neurology. This together, plus a very attractive valuation, has been the basis for our investment decision.
Herantis Pharma is listed on Nasdaq First North Helsinki with a current market capitalization of EUR 27 million. Read more about the company here.
See the BioStock interview with Mattias Häggblom from LSX World Congress in full below.
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