Building Xbrane Biopharma

Our exception might be an example

Aug 01, 2019
Jan-Willem de Gier (left) and Samuel Wagner

As part of their efforts to valorize academic biotechnology research, most European universities have set up business incubators or technology transfer offices (TTOs) to promote the development of companies. Usually, the business incubator or TTO helps file a patent application and write a business plan, hoping to procure funding for the company. In general, business incubators and TTOs strive to earn income for their institutions and usually will extract royalty payments or share claims. These claims may seriously hamper later investments by private parties and are often not in balance with the modest contributions that an academic institution can actually provide to push a biotechnology company forward.

There are, however, alternative routes to building biotech companies, and a way to identify them is to learn from the exceptions; i.e., biotechnology companies that have been built based on academic research using a path that differs from the norm. One such example is the Nasdaq North-listed, Swedish, biosimilar-developer Xbrane Biopharma. At present, Xbrane Biopharma is an R&D-driven company with around 40 employees and four biosimilars in the pipeline. Furthermore, Xbrane Biopharma has a strategic partnership with the leading generics company STADA Arzneimittel AG. This partnership is largely based on the success of one of the biosimilars, currently in phase III trials and positioned to hit the market in early 2022.

Xbrane Biopharma began in 2007 in my laboratory at the Department of Biochemistry and Biophysics at Stockholm University (Sweden). My Ph.D. student Samuel Wagner modified the widely used BL21(DE3) protein overexpression strain to enhance membrane protein overexpression yields. We called this new strain Lemo21(DE3), and it was based on years of research in my lab on the biogenesis of membrane proteins and the identification of the bottlenecks that hamper membrane protein overexpression.

Samuel wondered if our work had commercial potential and could be patented. I was completely unaware about how to assess the commercial applications of my research, but curious to learn. While exploring the idea we came across a privately held, locally based business incubator Serendipity Innovations (SDIP). SDIP, founded in 2004 by two young entrepreneurs – a Stockholm University-based professor in inorganic chemistry and his business partner – builds companies based on commercializing academic research using an unconventional concept that they first applied to the ceramics company Diamorph.

Diamorph was conceived in 2003 from a failed experiment in the founder’s laboratory. An equipment malfunction resulted in a new glass-like material with many potential applications, so he and his business partner formed a company. However, rather than writing a business plan around their accidental findings, they used it to make contact with as many ceramics companies as possible in order to identify their needs. The idea was to use the professor’s academic research to address selected needs in the market, as any advances might have the potential to form the basis of a company. By embedding Diamorph in an academic laboratory, they were able to build the company efficiently and cost-effectively.

In 2007, when we met SDIP, Diamorph was surviving on small innovation grants and some private investors, but by the beginning of 2019, it had evolved into a profitable, advanced materials firm with around 250 employees, and was sold for close to €170 million. 

After we contacted SDIP, they helped us write and file a patent application for Lemo21(DE3), supported by a small innovation grant. Since academics in Sweden own the rights to their research results, my department was not involved in the patent application. During the writing process, we discussed building a biotech company using the academic research of my lab, similar to how Diamorph was being built. We thought we’d use Lemo21(DE3) to make contact with biotech companies to identify their protein overexpression needs. Our discussions with SDIP also highlighted several key things: first we needed to operate as a team, respect boundaries, delegate efficiently and not interfere with the specific scientific or business tasks of each team member. We also needed to be prepared to fail, accept that our roles in building the company would most likely be transient, and possibly wait a decade to see any tangible results (very hard to fathom as an academic).

Many advised us against embarking on this adventure, but Samuel and I considered it an opportunity of a lifetime, even though Sam knew he’d have to leave the project for a post-doc in the U.S. My department was supportive, since it saw the company as an opportunity to create jobs. The department charged a nominal fee for embedding the company in my laboratory and did not claim any ownership. I was allowed to assume the role of pro bono chief scientific officer and contact and meet companies to identify their protein overexpression needs, as long as these activities did not interfere with my academic responsibilities. We officially founded the company in 2008. Xbrane is a play on the words ‘overeXpression’ and ‘membrane protein’ and reflects the company’s roots in this area of research.

It soon became clear that not many companies were interested in overexpressing membrane proteins in E. coli. But there was interest in overexpressing ‘difficult’ soluble proteins in E. coli, which was confirmed when New England Biolabs licensed Lemo21(DE3) and marketed it to customers as a strain suitable for overexpressing both membrane proteins and other ‘difficult’ proteins. This brought in needed income and added credibility for Xbrane, and helped attract support from Sweden’s Innovation Agency, the European Union and some private investors.

We then hired a business developer and a researcher to be able to engage in collaborative projects and to do contract research to identify protein overexpression needs that might help develop Xbrane. During this period, it became clear that my lab’s knowledge of membrane protein biogenesis and overexpression was instrumental in designing strategies to enhance production yields of ‘difficult’ soluble proteins, like antibody fragments. I realize that if I had not been involved in Xbrane, I would have likely missed out on the wider applicability of my lab’s abilities. By 2013, Xbrane had acquired enough funding to lease extra lab space and hire a second scientist and a technician. This enabled us to engage in a collaborative project aiming to produce a biosimilar candidate of the antibody fragment ranibizumab (Lucentis), used to treat macular degradation, a progressive eye disease that can result in blindness.

The project introduced us to the field of biosimilars and its many opportunities, and also reaffirmed that Xbrane had acquired all the expertise needed to efficiently produce antibody fragments in E. coli. The project ended abruptly when Xbrane’s partner merged with another company. But this unexpected setback presented a unique opportunity. In 2015, Xbrane began developing the Lucentis biosimilar (as well as others) on its own. We changed our name from Xbrane Bioscience to Xbrane Biopharma, and we planned to shift our base away from the university. To do this, we needed to go public, which we did in 2016 – a proud moment for all of us involved in the company. Yet it also made me realize that I needed to hand over my duties as CSO to one of my former students, who had by then developed into a very skilled R&D manager. I now run my academic lab full-time, and I am preparing to start another company using many of the same strategies that were instrumental in establishing Xbrane Biopharma. Again, students have also been key motivators in this decision.

Taken together, building Xbrane Biopharma was initiated by an entrepreneurial student and enabled by a supportive academic environment that allowed a startup to use academic research and infrastructure to identify the best possible way to build a biotechnology company. This is quite possibly an example worth exploring for others to valorize academic biotechnology research.  

Jan-Willem de Gier

Professor, Stockholm University

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