Quanticel Pharmaceuticals

www.quanticel.com

Background Information

Quanticel technology is based on the work of Stanford researchers and company founders Stephen Quake and Michael Clarke. Versant had backed other genomic technologies invented by Quake, and moved quickly to incubate Quanticel in 2010, shortly after the company was founded.

The Opportunity

The idea behind Quanticel’s single-cell genomic analysis technology is to unlock the mystery of cancer drug resistance through the analysis of tumor cell heterogeneity. As a tumor grows and cancer cells rapidly replicate, the genetic diversity of these cells increases. Over time some of these diverse cells grow resistant to treatment. The goal of the Quanticel technology is to identify which specific cells develop resistance, and to customize drugs and drug combinations accordingly.

Partnering Impact

The Versant team had a rich appreciation of the potential of Quanticel’s technology to accelerate the development of breakthrough cancer therapies and was ready to think outside the box to formulate an investment strategy to make it happen. As a first step, Versant matched the technology with executive talent and asked Stephen Kaldor, Ph.D., a Versant Venture Partner, to join Quanticel as CEO. Versant also leveraged ties to industry and major drug developers to understand how the Quanticel platform could be an asset to large-scale drug discovery efforts. In November 2011, Quanticel, Celgene and Versant formed a scientific collaboration to discover first-in-class cancer drugs. Celgene committed $45 million to Quanticel and received a 40-month technology license, equity, and exclusive time-based options to acquire Quanticel.

Outlook

The Quanticel-Celgene-Versant collaboration utilizes an innovative funding structure that departs from the traditional biotech venture approach. Versant and Celgene have capitalized Quanticel at an early juncture. Quanticel secured capital to build the core R&D applications of its technology and to generate a portfolio of drug candidates using its technology. Versant gained a strategic partner and potential acquirer, with a potential exit for its investment built directly into the agreement. Celgene has accessed a promising discovery technology for identifying novel targets and developing breakthrough therapies, and, if Celgene sees value in the emerging Quanticel pipeline, it can acquire Quanticel at one of several option points.

The Quanticel-Celgene-Versant collaboration builds on the Versant track record of formulating creative solutions to support talented entrepreneurs and invest in life-changing innovation. This collaboration was named the 2011 “Exit/Financing of the Year” by The In Vivo Blog.