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An affinity for Graffinity
October 2011
by Kimberley Sirk  |  Email the author
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STRASBOURG, France—NovAliX announced at the end of August it has entered into drug discovery collaboration in the field of osteoarthritis with Galapagos NV. Under the terms of the agreement, NovAliX will be responsible for the discovery of specific small-molecule lead candidates for a novel, validated osteoarthritis target chosen by its new partner.  
 
NovAliX will receive technology access fees, research funding and is eligible to receive success- based milestones from Galapagos. The partners are eyeing the European market (primarily France and Germany), but also seek to grow in Japan and the United States. NovAliX will identify hits using its Graffinity fragment-based screening technology that combines chemical microarrays with a proprietary SPR imaging method for the detection of compound-protein interactions. It will then further work toward the lead candidate stage by applying its medicinal chemistry and structural biology expertise.  
 
The name "Graffinity" comes with some history. Graffinity was originally a company formed in 1998 funded by U.S. and European partners to pioneer the chemogenomics space combining SPR and microarrays. Built from scratch, it took a few years to bring the technology to the appropriate level.  
 
Over time, the original company took on other partners and changed its focus, but in 2005, Graffinity was re-established as a separate legal entity. The new Graffinity was then on the road to market its unique screening capability with good success, as it has since inked deals with giants in the biopharma space such as Genentech, Amgen, Rigel, Pfizer, Elan and Boehringer-Ingelheim.  
 
Company officials say the Graffinity platform is suited for soluble proteins and has been successful with kinases, proteases, protein-protein interactions and most recently with intrinsically disordered proteins (IDPs) that are challenging to screen with other methods.
 
"We look forward to utilizing NovAliX's capabilities in biophysics and lead-generation methodologies for this novel target-based drug discovery program," said Dr. Graham Dixon, senior vice president for drug discovery at Galapagos, in a prepared statement. NovAliX officials say the two companies have enjoyed a "longstanding relationship." In part, this relationship is described as including a fee paid to Galapagos for service-based chemistry and medchem support.  
 
As for Galapagos, it will provide two things to the collaboration: an expertise in drug development, and a strong expertise in the osteoarthritis field. The company has a history in a cascade of other mergers and spin- offs that has led it to its strong current position in its field. NovAliX officials point to Galapagos' key areas of expertise and multiple pharmaceutical alliances in the joint and bone diseases field as attractive attributes. For its part, Galapagos was described as enticed by NovAliX's technology toolbox and trusted medchem expertise, which is revered because of past results.   Stephan Jenn, president of NovAliX, says this "drug discovery collaboration with a leading European biotech confirms the quality of our technologies and science, and underlines the value of our platform as an important tool to deliver valuable lead candidates."  
 
In key ways, the two companies differ. NovAliX is private, rather discreet and still small, yet it strives to build a company that provides external research capabilities with strong technology. The company calls its most attractive trait "integrated drug discovery," but notes it goes beyond basic pharma because of biophysics capabilities that appeal to other industry sectors.
 
NovAliX provides enabling chemistry and biophysical technologies to support the pharmaceutical industry's outsourcing needs from discovery to manufacturing. With proprietary SPR technology, X-ray protein crystallography, supramolecular mass spectrometry and chemistry, NovAliX offers comprehensive integrated services for small-molecule drug discovery.  
 
With advanced NMR technologies, NovAliX also provides fine characterization of biologics, thorough analysis of APIs and polymorphism studies to support pharmaceutical development and manufacturing teams. NovAliX Group, a team of 120 scientists, is located in Strasbourg-Illkirch, France and Heidelberg, Germany.
 
Galapagos, in contrast, is a big, public pharmaceutical company. One NovAliX official calls Galapagos, in his words, "gold diggers," while NovAliX "sells sieves and shovels." The two companies' goals are aligned as they don't compete with each other, but their combination of skills and capabilities complement each other.  
 
Galapagos specializes in the discovery and development of small-molecule and antibody therapies, and it is progressing one of the largest pipelines in biotech, with six programs in development and more than 50 discovery programs. The Galapagos Group has about 800 employees and operates facilities in six countries, with global headquarters in Mechelen, Belgium.  
 

 
Galapagos' first-half revenues slide on milestone payments  
 
MECHELEN, Belgium—Due to the timing of alliance milestones, Galapagos NV recently reported that its revenues in the first half of the year were lower than the same period in 2010. Revenues from continuing operations for the first half of 2011 were $54.2 million, compared to $62 million in the first half of 2010. The R&D division reported revenues of $26.4 million, compared to $37.5 million in the same period last year.
 
In contrast, the company's service division had a good first half, attaining 15 percent external growth, Galapagos CEO Onno van de Stolpe said in the company's earnings release that in addition to moving its 50-plus R&D programs forward in the first half, Galapagos' portfolio now has four clinical trials that are expected to deliver efficacy or proof-of-mechanism data by year's end.
 
 
"Galapagos is in a cycle where many of our business objectives are achieved in the last months of the year," van de Stolpe added. "With a potential new alliance in the pipeline and a number of achievable discovery milestones scheduled for the last quarter, we see opportunities to reach our full year 2011 guidance, but with the intrinsic challenges of R&D."
 
Code: E101105

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