Merck will be free to run Codexis’s biocatalyst-finding platform, CodeEvolver, at one of its own sites, developing proteins to speed up production of APIs (active pharmaceutical ingredients).
$15m per API
This week’s deal with Merck brings an upfront payment of $5m, followed by up to $13m over the next two years, as well as a milestone pot of $13m. Codexis will be eligible to receive up to $15m for each API developed by Merck using CodeEvolver enzymes.
Outside of Merck’s use for the biocatalysts it develops using CodeEvolver, Codexis will have rights to use the proteins to make APIs which are not competitive with Merck’s.
Biocatalysts can also be used as therapeutic agents in themselves. While GSK’s 2014 deal grants the British company rights to market proteins as drug products, Merck’s latest agreement allows their use only in API making. Codexis itself has an enzyme drug candidate in preclinical stage for treatment of phenylketonuria.
Codexis's GSK deal brought in $6m of CodeEvolver's $35bn revenue in 2014. The remaining business rests on in-house development of biocatalysts on behalf of pharma companies. Merck & Co. has been a customer of the service for the last eight years, using it to lower the cost of production of diabetes blockbuster Januvia and statin Zocor. Before that, Pfizer used the service to overhaul Lipitor’s manufacture.
Biocatalysts are a protein backbone designed to trigger the unique chemical reaction needed for producing specific APIs. “CodeEvolver chooses amongst the nearly infinite number of amino acid protein sequences to fit the chemical process as effectively as possible,” CEO John Nichols told in-Pharmatechnologist.com.
These enzymes can speed up production, performing multiple chemistry steps at a time within one reaction. But they are only cost-effective for about one in three APIs, Nichols said – still a sizeable market he values around a billion dollars.
When biocatalysts are appropriate, “we’re helping clients use less raw material, and operate at lower temperatures and pressures,” he said.
When Codexis worked with Merck in 2009 around Januvia’s launch, CodeEvolver discovered a biocatalyst that combines several chemistry steps.
“It saved them enough money that they reapplied for a new process with the FDA and [EMA] in 2013. Now Merck is increasingly using Codexis’s biocatalysts and [with this deal] we’re going to teach them how we did it.”
Meanwhile, development of biocatalysts themselves is getting faster and more efficient. Creating proteins for Lipitor took 20 Codexis scientists two years, but by the time the company worked with Merck on Jenuvia the process took around seven people one year.
“Today a similar technical challenge would take three to four scientists between three and six months. It’s become quicker and less expensive to design biocatalysts because of improvements in areas like high throughput screening,” said Nichols.