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Companion therapeutics
A growing market for therapeutic drugs to treat pets is fostering a startup boom. Gunjan Sinha reports.
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Last June, Aratana Therapeutics became the first-ever US-based biotech devoted to pet health to go public. At first, the Kansas City, Kansasbased companys bid to cash in on the growing pet market seemed overconfident as its initial public offering (IPO) struggled to lure investors. It eventually raised $40 million after slashing its stock price, but has since seen its stock price soar. Burlingame, Californiabased Kindred Biosciences bested that with their December IPO, which raised over $60 million. Veterinary drug development is largely sheltered from the vagaries that plague human drug development, which is fueling a mini boom in companies focused on companion animals. For investors, banking money on a drug that has already been tested in the target animal cuts both the time to market and the risk that it will failpromising a faster payout.
The startup dog and pony showAratana was founded by Steven St. Peter in 2010 while he was a managing director at MPM Capital. He left MPM two years ago to become Aratanas president and CEO because Aratana was going to be a defining company and [I] wanted to be part of that, he says. The company looks for human drugs in late phase 1 development that, because of their mechanism of action, may work better in a dog or a cat, typically after a drug has already demonstrated a proof of concept in animals.
Pets are people too may be an old marketing ploy, but its one the animal health industry has never really capitalized on. Apart from vaccines primarily intended for animals in the food chain, most drugs that have been approved for use in pets are merely reformulations or line extensions, aimed at preserving the life cycle of existing therapeutics, says Erin Wilson, a research analyst at Bank of America Merrill Lynch in New York City. In 2012, for example, there were 11 new animal drug applications approved by the US Food and Drug Administration (FDA), including six in companion animals. All of them, however, were essentially reformulations of legacy...