GSK investing $25M for Codexis manufacturing technology

GlaxoSmithKline ($GSK) is looking for ways to manufacture drugs more cheaply and with less impact on the environment. It has been an early adopter of continuous manufacturing, for example. Now the U.K. drugmaker is committing $25 million for a technology from a California company that allows it to make a large leap forward in biocatalysis.

GSK is licensing a protein engineering platform technology from Redwood City, CA-based Codexis and will install it at its R&D site in Upper Merion, PA. "We want to find more elegant ways to do the chemical process to make active pharmaceutical ingredients," Mark Buswell, head of advanced manufacturing technologies at GSK, said in an interview Monday. "We have some capabilities we have developed internally, but Codexis has a world-leading process that will advance our efforts by 4 or 5 years."

GSK will pay Codexis $6 million up front and up to $19 million in potential milestone payments, the companies said Monday. According to Codexis, it could win additional milestone payments ranging from $5.75 million to $38.5 million per project depending on how extensively GSK uses the new technology, and even royalties based on net sales.

Codexis said Monday that its platform allows "rapid development of custom-designed enzymes that are highly optimized." It does that with genetic libraries, along with automated screening techniques, algorithms for the interpretation of screening data and predictive modeling.

Buswell pointed out that the system can evolve an enzyme randomly, but it takes a tremendous amount of time to determine which amino acid to change or whether to change one or more. "What Codexis has done is crack the massive bioinformatics challenge," he said.

Codexis CEO John Nichols said the company originally was targeted at the drug industry but shifted much of its focus to ethanol for some years in a relationship with Shell Oil. As that business wound down, it decided to return to small-molecule drug development on a project-by-project basis. It helped Merck & Co. develop a less expensive, more sustainable process for its Type 2 diabetes drug Januvia.

The deal with GSK is Codexis' first move to a licensing model, but Codexis hopes it will allow it to get deeper into drug development. Nichols said the company estimates that one-third of the small-molecule drugs could benefit from custom enzymes. While its biocatalysis has traditionally been used for batch manufacturing to eliminate some of the costly steps, Nichols said it could be used in continuous manufacturing: "We believe it has broad applicability to a select number of proactive drug companies."

GSK CEO Andrew Witty has been moving the company toward cheaper and more sustainable manufacturing, which is one reason he likes continuous manufacturing. It uses smaller reactors that run 24 hours a day, making the API in a tube and eliminating the need for time-eating heating and cooling processes. It also eliminates much of the hazardous material that ends up as toxic waste and must be disposed of. The smaller equipment also means smaller, less costly plants are needed. It is using the process at a plant in Singapore where Witty said the shift away from chemical reactions to enzymatic reactions would result in a 50% reduction in both cost and carbon footprint. Witty also announced plans last year to employ continuous processing at an £85 million ($136.5 million) tablet plant it will build in India to serve that market.

Buswell said the enzymes can be developed at the R&D facility in Pennsylvania and then manufactured internally or sourced and then shipped to whichever plants are set up to use them.

- here's the Codexis announcement
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