A new Taiwan biotech company will finish development of an HIV/AIDS drug from Genentech (Private:DNA). The company hopes to have the drug on the market in a short three years.
TaiMed Biologics was formed with the help of a $20 million infusion from the National Development Fund of Taiwan, an investment that gives the Fund a 40% stake in the company. TaiMed claims to have $50 million in capital. The supposition is that the rest of the money came from Genentech.
The transaction between TaiMed and Genentech was sometimes described as a partnership, and at other times it appeared that the Taiwanese company had bought the rights to the drug from its American counterpart. The financial terms of the agreement between TaiMed and Genentech were not disclosed.
Genentech found itself as the owner of the drug when it completed the purchase of Tanox, early in August. Because its primary purpose in buying Tanox was to gain full ownership of asthma medication Xolair, Genetech wasted no time in offloading TNX-355, an AIDS drug that completed Phase IIa tests in 2006. That test produced positive results, but the drug has apparently languished since then.
TNX-355 is a monoclonal antibody that prevents the HIV virus from entering CD4 cells. It appears to have a unique, complimentary mechanism to the anti-retroviral drugs that are the current treatment for HIV/AIDS.
TaiMed is very well connected. It took as its co-heads former Vice Premeir Tsai Ing-wen and David Ho, a famed AIDS researcher. Academia Sinica President Chi-Huey Wong will be a board member.
Dr. David Ho was one of the first scientists to propose that AIDS was caused by a virus, and was first to promote a cocktail of protease inhibitors and antiretroviral therapy for AIDS patients. The Taiwanese-American received the 1996 Man of the Year award from Time magazine for his work.
TaiMed will start a Phase IIb trial of TNX-355 soon, conducting trials in the U.S., Europe and South America. After the AIDS drug is commercialized, TaiMed will turn its attention to drugs for influenza and avian flu, though it says most of the work will be done overseas, not in Taiwan. That fact is surprising, because Taiwan is interested in developing its biotech capability, and the $20 million invested in TaiMed is touted as a step in making its biotech business a reality.
The National Development Fund has a budget of $907 million. So far, the fund has invested $241 million in 12 biotech companies. The fund could make a further investment in TaiMed if the company decides to build a manufacturing facility.
In yet another unusual move, Taiwan’s Minister of Economic Affairs said she would approach private individuals to invest in TaiMed. One of the first on her list was Terry Gou, chairman of Hon Hai Precision Industry Co, the large contract manufacturer of electronic components. He is reported to have declared that he would make $2.67 billion available for cancer research in Taiwan and mainland China.
As part of its initiative to encourage biotech/pharmaceutical development, Taiwan in June passed a statute that gives a tax deduction for 35% of R&D/personnel development costs over the next five years. If a company exceeds its two-year average of R&D/personnel development spending, then 50% of the extra is tax deductible.
At least one observer of the pharmaceutical scene in Taiwan complained that the government was spending money to buy almost-developed products, rather than on the long-term research that would discover unique drugs and build a self-sustaining biotech industry. That path would, of course, take much longer to produce results.