Discovery on demand

GENEVA—Merck Serono, a division of Merck KGaA, and Compugen Ltd.recently announced the establishment of Neviah Genomics, a novel startupcompany that will focus on discovering and developing novel biomarkers for theprediction of drug-induced toxicity. The agreement comes on the heels of a 2009collaboration between the companies for the discovery of "biomarker signatures"for drug-induced toxicity.

"Following our prior successful collaboration with MerckSerono, we are very pleased to expand this relationship and enter into this newand exciting partnership. We are honored to be the first Israeli company tobenefit from the establishment of Merck Serono's Israel Bioincubator and lookforward to taking our partnership to the next level," Dr. Anat Cohen-Dayag,president and CEO of Compugen, said in a press release. "Furthermore, theformation of Neviah Genomics on a 'discovery-on-demand' basis enables Compugento both continue its focus on therapeutic monoclonal antibodies and therapeuticproteins in the fields of immunology and oncology, and provide potential futurebenefits for our shareholders from our equity interest in Neviah and royaltiesfrom future product sales."

Neviah Genomics will be operating out of the Merck SeronoIsrael Bioincubator and is the first company funded by the program. MerckSerono will be responsible for providing initial funding for Neviah Genomics,while Compugen will employ proprietary predictive discovery technologies andreceive an equity ownership in the company as well as a right to royalties onfuture sales. Specific financial details were not disclosed.

"Neviah's mission is to become a state-of-the-art providerof toxicogenomic solutions for pharma and biotech companies that are looking tominimize attrition for their preclinical candidate drug and therapeutic leads,"says Simone Botti, head of Merck's Israel Bioincubator Fund and acting CEO ofNeviah Genomics. "There is a very big unmet need for a fast and efficientsystem that allows you to easily identify candidates that might havesignificant toxic effects. Neviah is going to develop products that will enableclients to test their own drugs."

Botti adds that Neviah Genomics' current focus ishepatotoxicity, "because it is one of the main causes of termination of earlydevelopment of a molecule." Eventually, the company might also expand intoother fields such as cardiotoxicity. According to Botti, Compugen stood out asa potential partner due to its technology and the companies' previous businessrelationship.

"We knew that Compugen could bring its own computationalprowess to support the project," says Botti. "The fact that Compugen had provedthemselves on an earlier biomarker collaboration that we had was also a factorin the decision, and as a matter of fact, the strong relationship andconfidence that was built from a previous project certainly allowed us toaccelerate the Neviah deal."

The new start-up will benefit from the use of Compugen'scomputational discovery platforms, Cohen-Dayag says, in the search forbiomarker signatures for drug-induced toxicity. Those signatures will then beused to develop toxicogenomic diagnostic tests, for which Cohen-Dayag notesthere is a growing market need, and the resulting diagnostic tests will be usedto predict drug-induced toxicity and integrated into a biomarker platform inorder to help prioritize and develop drug candidates.

Merck Serono launched the Merck Serono Israel BioincubatorFund in 2011 as part of Merck Serono Ventures, with the aim of promotinginnovation by enhancing connections between academic research and thebiotechnology industry in Israel. The fund provides seed funding and access tostate-of-the-art laboratory facilities within Inter-Lab, Merck Serono's Israeliresearch and development center, out of which Neviah Genomics will operate. Thecompany has earmarked a total of approximately $12.1 million for the Bioincubatorinitiative, and according to Botti, expects to invest in eight to 10 companies.

"Neviah Genomics is a perfect illustration of our goalsbehind the establishment of the Israel Biotech Incubator: to leverage Israeliscience and know-how and get access to novel products and technologies for thebenefit of Merck Serono's core therapeutic areas," Susan Herbert, executivevice president of global business development and strategy at Merck Serono,said in a press release. "In this regard, we are delighted to be collaboratingon our first investment with Compugen, one of the premier biotech companies inIsrael and a world-leading predictive drug discovery company. We believe thatour joint technology and resources represent a unique basis for a startup to enterthis emerging field that has the potential to significantly reduce the risk ofdrug discovery and development."