News Article

Selexys: a Brief History: prepared and copyrighted by MPM Capital Inc
Date: Jan 01, 2019
Source: ( click here to go to the source)

Featured firm in this article: Selexys Pharmaceuticals Corporation of Oklahoma City, OK

Selexys Pharmaceuticals is probably the most notable biotech company to spring from the Sooner State*, far from the Boston and San Francisco biotech hubs. Why Oklahoma? Selexys CEO Scott Rollins and COO Russell Rother left graduate school in Oklahoma for post-docs at Yale University where they co-founded Alexion Pharmaceuticals, based in part of Scott's graduate thesis which went on to become the drug Soliris. The commercial success of that drug, which treats rare hematologic disorders, drove Alexion to a $28B market cap in 2016. Scott and Russell left Alexion to build Selexys "back home" in Oklahoma City, where academic founder Rod McEver (Oklahoma Medical Research Foundation) pioneered the discovery and understanding of a class of cell-adhesion proteins called selectins.

Selexys grew frugally, with funding from grants and local angel investors to take its lead drug, crizanlizumab (SelG1) through phase 1 clinical trials. The company had acquisition offers at the time but instead chose to work with MPM to build more value by taking the drug into a large (200 patient) phase 2b clinical trial in Sickle Cell Disease. MPM's Todd Foley led the company's series A financing as the only institutional investor, together with local angel investors and non-dilutive funding from Novartis which secured an option to acquire Selexys after the trial. (MPM's LP relationship and strategic partnership with Novartis dates back over a decade and is managed by MPM co-founder and Managing Director Ansbert Gadicke, MD and Todd Foley, working collaboratively with senior management at Novartis in what is arguably the most successful example of a venture capital/big pharma partnership.)

The Selexys drug, an antibody blocking p-selectin, prevents red blood cells from sticking to blood vessels and to white blood cells which can lead to blockage of small blood vessels. Sickle Cell Disease affects ~100,000 Americans (1 in 365 African-Americans) and millions worldwide. The disease's primary manifestation is frequent (several annually) Sickle Pain Crisis events when sticky red blood cells block small blood vessels throughout the body, resulting in intolerable pain as well as destruction of tissue downstream from the blocked vessels. Treatment consists of "toughing it out" for several days in a hospital on IV morphine to control the pain until the crisis self-resolves but leaves behind damage to vital organs which reduces life expectancy to 42-47 years in the US (much lower in the developing world). The only drug approved for the disease is a 50-year-old chemotherapy drug which was approved to reduce the frequency of sickle pain crises 20 years ago, but, like all chemotherapies, carries side effects which limit its acceptance as a lifelong therapy.

In Selexys' recently completed clinical trial in 200 sickle cell patients, crizanlizumab reduced the number of annual sickle pain crises by ~50% with good safety. This potential breakthrough treatment was honored in December with the keynote presentation slot in front of 20,000 attendees at the American Society for Hematology meeting and a simultaneous publication in the New England Journal of Medicine.

In November 2016, following this successful clinical trial, Novartis acquired Selexys for $240M with another $415M in potential milestones upon development and commercial success. This $655M acquisition yielded a 4.0x return upfront to MPM with a potential return of 11.7x if all milestones are achieved. Novartis is well equipped to bring this drug to market in both the US and the developing world to improve the lives of patients with this terrible disease.

Prior to the acquisition, Selexys spun-off a second program into a separate company, Tetherex, which continues now with the same management team to develop its promising drug (targeting different selectins) in early clinical development to treat other "sticky cell" diseases including Crohn's and blood clots. MPM holds a significant ownership stake in Tetherex and continues to actively manage this portfolio company with Todd Foley on the board.

INTERESTING FACTS -- Absent modern medical care, sickle cell patients often die before having children and passing on the gene, so why hasn't natural selection eradicated the disease? Patients with two genetically defective hemoglobin genes have sickle cell disease and reduced life expectancy. With only a single defective gene however, the person is normal and free of sickle disease but in addition is significantly protected from malaria. This anti-malaria effect is beneficial to the ~1 in 13 Africans who carry the gene and live in malaria infected countries.

*Aptly here, the nickname comes from those enterprising Oklahoma settlers who rushed in to claim land in advance of the competition.