Testing New Business Model, Araxes Pharma Signs Deal with Janssen

Image licensed by Depositphotos.com/Christian Delbert.

In a short announcement yesterday, a previously unknown San Diego startup called Araxes Pharma said it entered into an exclusive partnership with Janssen Biotech of Horsham, PA, to develop a new group of cancer drugs that target an undisclosed signal pathway.

Terms of the deal were not disclosed, and CEO Troy Wilson wrote in an e-mail, “We can’t say much beyond what’s in the release, but it’s a great deal for both parties.”

So much for that deal, right? But there is part of the Araxes story he’s willing to discuss—and it’s an example of an innovative business model for pharmaceutical startups that’s gaining a foothold in San Diego.

Wilson (who is a San Diego Xconomist) was previously a co-founder and CEO at San Diego-based Intellikine, which was acquired by Japan’s Takeda Pharmaceuticals just over a year ago in a deal that could eventually pay out $310 million. The sale culminated years of work, but to Wilson, the experience also underscored one of the frustrating aspects of today’s drug development business.

In creating a pharmaceutical startup, he explains, “You get a team together and start working on a problem, and they’re smart people, and they almost invariably come up with more than one answer to the problem. That’s what happened at Intellikine and that’s what happened at Ambrx,” a specialized developer of antibody-drug conjugates where Wilson worked a decade ago. Many early stage pharma startups end up with a group of promising compounds under development.

Troy Wilson

“The problem comes when you want to do a partnership or an acquisition with a big pharma,” Wilson says, “because they just want to buy from the a la carte menu.” In many transactions, the acquiring pharmaceutical company is only interested in the lead drug candidate, and the other compounds become castoffs.

This is the same issue that Amira co-founder (and San Diego Xconomist) Peppi Prasit sought to address when he founded Inception Sciences in late 2011. With help from Menlo Park, CA-based Versant Ventures, Prasit structured Inception Sciences to operate as

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.