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Evotec catches Zebrafish
HAMBURG, Germany—Evotec AG has landed Summit Corp. plc's Zebrafish services business unit to Evotec AG for nearly $776,000 in cash. The acquisition of Summit's Zebrafish technology offers Evotec a strong addition to its industrialized high-quality drug discovery platform.
According to the companies, this capability is valuable to drug discovery as it provides important, whole-organism data about the safety and toxicity of drug-like molecules at an early stage of lead optimization. It thereby allows prioritization of the most promising compounds early in the drug discovery process, reducing the risk of potential later-stage failure and, ultimately, lowering costs in drug discovery and development.
Evotec CEO Dr. Werner Lanthaler said the company continuously seeks to add technologies and capabilities to enhance its drug discovery platform to enable more efficient (cost and time) identification of clinical candidates for its partners.
"The Zebrafish screening technology neatly adds an early stage profiling which will assist in identifying compounds to move from early hit to lead into lead optimization," he says.
Lanthaler says the goal from this acquisition is to build it up from its immature state to one where it provides incremental revenues to Evotec's Drug Discovery Alliance Business, both through stand-alone screening and profiling and also from integration into its strategic collaborations—as a profiling tool or through use of various efficacy models in development.
"Success will be measured in the operation's ability to shorten our drug discovery timelines with our collaborators, which will obviously lead to revenue growth," he says.
According to Dr. Mario Polywka, chief operating officer of Evotec, the deal gives the company access to a portfolio of validated safety pharmacology and toxicology assays and disease models for target validation that enjoy growing interest in the industry.
"The integration of this business offers significant synergies, including the move of Summit's UK operations into our facilities in Abingdon, the integration of this offering into our global sales and marketing network as well as the use of the Singapore facility as a base to target new growth markets in the Far East, expanding our current business reach," Polywka notes.
Lanthaler said work will continue at Evotec's U.K. and Singapore locations.
"Our Singapore operation currently performs against a single research agreement with Johnson & Johnson," he says. "This agreement, whilst building and transferring assets from the established UK operations to serve Johnson & Johnson in Singapore, will also allow us to access the Asian market more effectively. The operations in UK are actually over the road from our Abingdon operations and they will move across in six to eight months."
Evotec will work with the zebrafish, which have the potential to accelerate and de-risk the drug discovery and development process by reducing attrition rates and lowering the development cost of producing new drugs. Zebrafish are well-characterized model organisms and are used in the screening of potential drug candidates to provide invaluable in vivo safety and efficacy data from the earliest stages of drug discovery and throughout the development process.
With a significant genetic similarity to humans and the presence of many vital organs including the heart, brain and liver, the larval zebrafish is highly suitable for screening potential drug candidates for efficacy and safety effects. Screening in zebrafish provides many advantages over other established in vivo models by allowing large numbers of compounds to be rapidly profiled using small amounts of compound.
According to Summit chief executive Steven Lee, the transaction is positive news both for Summit and the zebrafish services business.
"Evotec offers the zebrafish business, including its staff, an exciting future," says Lee. "Importantly, the deal provides immediate financial support to Summit that will assist our on-going efforts towards securing the future of the business. This will focus on our iminosugar drug discovery platform, an area of science in which Summit has an unparalleled expertise, and offers great potential for the discovery of new medicines."
According to Lanthaler, through the acquisition of Summit's zebrafish operations, his company enhances its "world-class drug discovery platform."
"Besides strict cost containment one core element of our Evotec 2012 Action Plan to Focus and Grow is the further investment and expansion of our unique Discovery Alliance Business," says Lanthaler in a statement. "This transaction is a first example of how we will continue to develop this business to build on our world-class leadership role."
As part of its 2012 Action Plan, the company also eliminated 45 staff positions and wound down the U.S. subsidiary it purchased in 2007. The plan aims to ensure the company can comfortably extend its cash reach beyond 2012.
The job cuts, which will leave the company with less than 330 employees, and the closure of its California-based subsidiary Renovis Inc., are a result of the company "re-engineering" its drug discovery and development operations.
Lanthaler said the action "realizes significant cost savings necessary for optimal shareholder value creation."