This February, Stockholm-based drug developer Sprint Bioscience announced that Erik Kinnman will take over as CEO of the company. The company specialises in preclinical development of small molecules within oncology. In an interview with BioStock, Kinnman talks more about his background, his view on the company and the business model.
Sprint Bioscience has chosen a business model that is different from other companies in the industry. Many biotech companies tend to develop their drug candidates up to phase II clinical trials and then take the final clinical step together with a partner with strong resources. In Sprint Bioscience’s case, the partnering step is taken much earlier than that, which has allowed the company to focus on what it does best – finding good target proteins and molecules that can then can be further developed and taken through clinical tests by pharmaceutical companies that focus on the later phases of the drug development process.
Validated business model
The pharmaceutical industry has a basically insatiable need for new projects that tackle various medical challenges in new and innovative ways, not least as the trend has moved towards the large companies relying on innovation to come from less fast-paced specialised companies.
Sprint Bioscience’s goal is to meet the need in the early stages of drug development. With the focus set on the treatment of cancer, the idea is to quickly and efficiently move from idea to drug candidate. Here, the company has developed a process to evaluate, as time-efficient and resource-efficient as possible, whether a molecule has the drug properties needed to make it all the way to the market and – not least – benefit the patient.
»The company has an impressive combination of strong scientific and industrial expertise in cancer biology and chemistry combined with a unique process for developing future drug candidates.« – Erik Kinnman, CEO Sprint Bioscience
Several development projects have been outlicensed
Sprint Bioscience’s project portfolio currently consists of five development projects, two of which have been outlicensed to be further developed by a partner – a clear validation of the company’s business model. The most advanced is the oncology project PETRA01, which was licensed to the cancer drug company HiberCell this March. The deal means that Sprint Bioscience is eligible for up to 240 MUSD in interim payments plus royalties on future sales, of which 5 MUSD has already been received.
Sprint Bioscience has also outlicensed a project for the treatment of NASH (nonalcoholic steatohepatitis) to LG Chem where Sprint Bioscience can receive up to approximately 230 MUSD in milestone payment, plus royalties.
Sprint Bioscience to take next step with new CEO and new capital
On March 1, Erik Kinnman took over as CEO of the company. Kinnman has had a long and successful career in the pharmaceutical industry, including senior positions at AstraZeneca and SOBI. Most recently, he comes from the pharmaceutical developer Abliva, where he has been CEO since 2016.
One of his first tasks was to strengthen the company’s financial position and already in April the company carried out a directed share issue of 20.7 MSEK to a group of existing and external investors with Roosguppen in the lead. With this capital injection the company can now accelerate the activities in the development projects and business development. Read more about the issue here.
BioStock has contacted Kinnman to learn more about his background and his thoughts on the company.
Erik, can you start by telling us a little more about your background?
– I have a broad background that complements the expertise and experience already available at Sprint Bioscience. I have extensive experience in the drug development process from pre-clinic to clinical development and on to commercialisation. I have held leading roles in clinical development, business development and financing in both large pharmaceutical companies and smaller biotech companies.
– Furthermore, I have worked in the financial industry with a focus on analysis of pharmaceutical companies. I am a doctor specialised in neurology and pain management and I am an associate professor at Karolinska Institutet.
What attracted you to Sprint Bioscience?
– The company has a very interesting focus on developing early innovative drug projects in cancer treatment. Major scientific advances have been made in this area and Sprint Bioscience can help transform these opportunities into drugs that are brought to market and to the cancer patients.
– The company has an impressive combination of strong scientific and industrial expertise in cancer biology and chemistry combined with a unique process for developing future drug candidates. It can thus be first with a new potential treatment for cancer that pharmaceutical companies with strong resources and capital can develop further to finished medicines.
– The quality of the business is validated through the three major agreements concluded so far and the 123 MSEK in revenues that these agreements have already generated.
What do you hope to accomplish at Sprint Bioscience?
– The focus in the near future is on realising opportunities for new business agreements and ensuring that the company is well funded. I see it as an important task to clarify the great values that exist in the company’s project and business model for current and potential new investors. After that, of course, we want to optimise the possibilities to continue to deliver new highly interesting projects that can lead to additional licensing agreements.
What strengths do you see in the business model, which differs slightly from the one usually seen in smaller drug developers?
– The business model provides a favourable spread of risk with very good conditions to generate revenue in the near future that will be able to grow significantly over time. With limited resources and costs, high-quality projects that are attractive to the pharmaceutical industry can gradually broaden the current portfolio and thus increase the opportunities for revenue from several outlicensed projects in the form of access, milestone, and royalty payments. After a license agreement has been signed, there is no costs for Sprint Bioscience and all continued drug development is financed by the partner.
Can you tell us a little more about how you go about getting from idea to something that can be licensed?
– We focus on areas that are important for the growth and spread of cancer, namely the immune system and the tumour’s local environment and metabolism. Through a strong network within academia and industry, we have great knowledge about what is interesting from both a scientific and commercial perspective.
– Our researchers identify new target proteins that can prevent cancer growth and help the body’s own immune system fight cancer cells. In a highly effective process, models of target proteins and molecules suitable for these are built, and experimental models that verify that the mechanism is relevant for the treatment of cancer. Once we have molecules that work in the models, the projects can be licensed out.
Sprint Bioscience has revenues, but is still loss-making. What has to happen to ensure that we see a stable positive cash flow?
– It is true that the company is still making a loss, but a large part of the development of Sprint Bioscience has also been done with the help of revenues from outlicensed projects. As we expand our portfolio with limited investments, the opportunities for revenue increase, the size of which also increases as the projects reach their milestones. Our goal is to become cash flow positive within the next few years and continue to run a business with profit-generating growth.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.