Okapi Sciences - antivirale geneesmiddelen voor dieren
“We have built our company on the topnotch research done at KU Leuven.”
Dr. Erwin Blomsma
Founder of Okapi Sciences and ViroVet
Researchers often use animal models when searching for human medication. The discovery of Tenofovir, which currently is the world’s most commonly used anti-HIV agent, is a case in point, since aids in cats (caused by feline immunodeficiency virus or FIV) was used as a model. Although 1 out of 15 cats in our area is infected with the virus, the FIV-data were shelved when the product entered the next stages of development. Professor Johan Neyts of the KU Leuven Rega Institute and Dr. Stefaan Wera, who was CEO of reMYND at the time, saw a huge potential for this kind of ‘recycled’ medication and wondered whether this could be the basis for a startup company. At that moment, LRD contacted me to look at the possibilities and help develop a business plan, since I had been closely involved in several startups before. Market research, writing and fine-tuning the business plan and building a shortlist of investors took us most of 2007. We also incorporated other assets in the business plan based on KU Leuven’s herpes and hepatitis research, for which there was a lot of relevant research data available.
Back in 2007, there were no veterinary biotech companies so there was no benchmark for us nor for our investors. Animal Health companies generated little innovation and hardly shared any information. Our interactions with the investors and their consultants forced us to generate several annexes to our business plan with details on veterinary blockbusters, regulatory aspects, the M&A scene, etc. Add the financial crisis of 2008 to that and it explains why it took nearly two years from the initial idea up to the capital increase. We eventually closed our 8.5 million euro financing round on October 17, 2008. The first two employees started in December but we truly took off in January 2009 adding an additional two employees and using lab space at the KU Leuven Rega Institute. As we shared lab space with the university, they could use our equipment and we used theirs. We started growing very quickly and in November 2009 already we had to move to a larger office on the Haasrode Industry Park where we as a team converted several meeting rooms and offices to laboratories. As our research and development activities accelerated and the team grew to more than 10 researchers, we started strengthening our pipeline including the decision to replace one of our core products by a product which we thought was lower risk to develop and commercialize. And indeed, it proved to be the right decision. Novartis Animal Health showed interest in that particular product a few years later and made a deal with us in August 2013 to jointly develop and commercialize what should become the first antiviral drug registered for animals in the world.
In 2013 a lot of things changed for us in the Animal Health sector. Zoetis, Pfizer’s Animal Health division, went to the stock market. It was the first major IPO in the industry and provided analysts and investors with a first detailed look into the animal health arena. A few months later, Aratana Therapeutics followed Zoetis to the stock exchange and several other animal health companies started preparing their IPO’s. Aratana was a startup company a few years younger than Okapi Sciences, but could easily take these steps. The American investment climate was excellent at the time and animal health and in particular Aratana’s business model became very attractive to investors. Shortly after their IPO I had lunch with Aratana’s CEO in Paris to learn more about Aratana and their experiences but also to assess if there was a basis for collaboration on one of our projects. Since we were preparing a second investment round at Okapi Sciences, we arranged for them to get access to our dataroom. As the discussions continued later that year the idea grew that an acquisition by Aratana could be an attractive alternative to our financing round. In December 2013, just before the holidays, we canceled the second investment round and decided to put all our efforts into closing a deal with Aratana, and so it happened on January 6th, 2014. We immediately saw the advantages of the collaboration, as did Aratana. The acquisition did however also highlight the difference between Europe and the US where more money is available and higher valuations can be achieved. For example, it took us almost one year to sign a termsheet for a 10 million euro second investment round. Aratana’s second public offering after the acquisition raised close to 100 million dollar in a few weeks. Okapi Sciences’ acquisition resulted in a nice return for our investors and shareholders (including KU Leuven and Gemma Frisius Fund) and on top of that the research activities of the company could stay in Leuven.
Because Aratana focuses on pet animal diseases, we started thinking of continuing our livestock research, in which we had already invested millions. After several discussions late 2014 and early 2015, with the approval and support of the board of directors of Aratana, we created a new company ViroVet. Once ViroVet has raised sufficient capital, it will be an independent pioneering company dedicated to the development of disruptive and innovative technologies for the control of viral diseases in livestock. Our strategy is to develop and commercialize antiviral drugs and next generation vaccines to provide the livestock industry as well as national governments and international organizations with powerful solutions against outbreaks of viral diseases.
It is clear that with the growing world population there is an increased demand for more protein-rich diets. With the increasing concentration of livestock industry, the intensifying global trade and climate changes, there is an ever increased risk for the global spread of viral diseases, severely damaging the livestock industry. So, we need to be able to intervene very quickly when something goes wrong. And that’s where ViroVet comes in. We feel that ViroVet’s products have the potential to reduce the use of antibiotics and revolutionize the livestock industry worldwide.
ViroVet will be headquartered in Leuven and we will continue and even strengthen our close collaboration with KU Leuven and the Rega Institute. During the creation of Okapi Sciences, LRD helped us to arrange all the necessary veterinary back licenses (as some of the products were licensed out already) and to set up the associated license agreements with Okapi Sciences. We also regularly met with LRD’s IP department as there were several patent applications in which our products were involved. For ViroVet, we will probably go through the same exercise again with LRD as several additional assets were identified together with and at the Rega institute that are important for our future growth. The topnotch research of the world renowned Rega Institute had originally not been intended for animals, but has been of vital importance for us. Thanks to the them, we got a piggyback ride to a successful veterinary story that still continues today with the launch of ViroVet.