The development gives muscle to Swedish life science companies, the overall innovation in Sweden is on par with companies that AstraZenecaLarge companies have the resources and infrastructure to bring promising drug candidates to market, while small companies account for much of the innovation power.
– The interest of the big pharmaceutical companies in making early partnership agreements has been accentuated. Previously, phase II data was usually required, now the pendulum has swung and the big players are more interested in earlier agreements. If they can be involved in the early development, they can also steer the type of study they want, says Jessica Martinsson.
Early agreements give more bang for the buck
Because even though it is high risk in the early projects, it can be even more expensive to enter development late. This is not only because the project is further along and therefore valued higher, but also because studies that are not optimally designed may need to be redone at a later stage, which often happens.
– The Swedish investment market has not really understood this. Instead, many owners want the companies to pursue the projects well into the clinical phase because they believe it is a business benefit, but it does not have to be that way at all, says Jessica Martinsson.
BioArctic a pioneer
Licensing research from smaller players has been a growing trend in recent years, and there are predecessors that have shown successful results.
– One example is BioArctic, which did this very early and went all the way to the market, says Jessica Martinsson.
BioArctic develops drugs that slow the progression of neurodegenerative diseases such as Parkinson's and Alzheimer's disease. They are behind the drug leqembi (lecanemab-irmb) which was developed in collaboration with the partner Eisai and is the first proven drug that slows down Alzheimer's disease.
– This is a business model that many have now seen as very attractive, where you reduce the risk and share the cost, says Jessica Martinsson.
Rising contract amounts
Globally, the total contract value increased by 4 percent from 2022 and reached USD 2023 billion in 186, according to an analysis from Nature ReviewsIn 2023, several agreements were also signed between Swedish life science companies and major players.
Among the latest licensing deals, the strategic collaboration and licensing agreement that Aqilion ended with Merck in early 2023. Aqilion develops new innovative treatments for diseases caused by chronic inflammation and dysfunctional immunological reactions.
The collaboration aims to discover, develop and commercialize small molecule inhibitors of the protein TAK1. Through the agreement, the Swedish company received a direct cash contribution of EUR 10 million, but it also includes further compensation for future development, commercialization and royalties on future net sales.
More Swedish examples
During the autumn, it also announced Abliva that they entered into a licensing agreement with Owl Therapeutics which funds continued clinical development and later commercialization of the candidate NeuroSTAT for the treatment of traumatic brain injury. The agreement is tied to milestones and has a total value of $43,65 million. When the news broke in November, it also gave Abliva's share a boost of 24 percent.
The examples of licensing to major international players are therefore plentiful. Most recently in February, Gothenburg-based Vicore Pharma an exclusive licensing agreement with Japanese Nippon ShinyakuVicore conducts research and development of molecules with agnostic effects and the agreement concerned the company's drug candidate C21, an oral treatment for idiopathic pulmonary fibrosis, IPF.
The agreement involves an upfront payment of USD 10 million and also entitles to potential milestone payments of up to a total of USD 275 million.
At the beginning of the year, Genovese – as part of a license agreement with Selecta Biosciences from 2021 – 4 million USD after a sub-licensing of Xork-enzyme. This is to be used together with the gene therapy product AT845 for the treatment of Pompe disease, a glycogen storage disease caused by an inherited enzyme deficiency. Additional revenues of up to USD 135 million from clinical development, commercialization and royalties could be generated when the enzyme is used with AT845 for the same purpose.
A strong quality marker
License agreements are increasingly coming into focus and can be seen as a clear mark of quality for projects because it means that they have passed thorough quality checks and evaluations by the partner.
Even if the licensing is terminated, which happened, for example, between BioInvent and Exelixis in January, this means that the project has received funding for parts of its development.
The fact that a project is returned does not mean that it needs to be closed, but rather that development can continue in a different form, says Jessica Martinsson.
Predicts further agreements
She also sees no signs that the trend with licensing agreements will subside, quite the opposite:
– We have a fairly young portfolio in Sweden. What has happened is that we have a strong scene with companies that come from academic research. We are now starting to get to a point where they are commercially viable, says Jessica Martinsson.