Why Inion pulled out of Cambridge collaboration

Finnish biomaterials and medical implant specialist Inion announced this month that it is to close its European Technical Centre in Cambridge less than two years after it opened, and is negotiating to end its collaboration with the university’s Centre for Medical Materials.

The laboratory was opened in November 2005 with great fanfare by the then science minister, David Sainsbury, to carry out early-stage research on the company’s bioactive and biodegradable bone-promoting polymer, Optima. The company promised to invest between €15 million and €20 million over four years at the Cambridge centre and its other R&D facility in Tampere, Finland, to develop the product.

Inion CEO Chris Lee told Science|Business, “No one likes to close facilities and decisions are not taken lightly, but given our current financial position and the need of the company to generate top-line sales from the existing platform, it was a decision that we had to take.”

The collaboration with the university was due to run for three years. “We’ve had an excellent collaboration with the university, and thus far it’s been very successful,” said Lee.

“The important thing about that collaboration is that it’s not just us and the University of Cambridge, there are other parties involved in that as well. We’re in discussion with them right now so that the project can continue but without Inion’s participation going forward.”

The research aimed to produce a new generation of biomaterials by combining Inion’s Optima biodegradable polymer with nano-phase bioactive ceramics under development at the university.

Shake-up time

The closure of the Cambridge centre follows a recent management and strategic shake-up that has seen the company focusing its resources on developing the US market for its existing orthopaedic and spinal surgery products, and shifting its R&D effort from early-stage research to product development. Cutbacks earlier this year reduced staff numbers from 114 to 89.

The architect of the restructuring is Goran Ando, former CEO of the UK antibody company Celltech plc at the point it was sold to UCB Pharma, and previously head of R&D at AstraZeneca. He was brought in as chairman of Inion by restive shareholders in July 2006.

Lee, who was appointed CEO in May with a brief to apply the new strategy, said the centre in Cambridge had met its objective of identifying the molecular mode of action of n-methyl-pyrrolidone (NMP), the bioactive component of Optima, and strengthening the intellectual property surrounding NMP.

“We filed six patents in that regard from the Cambridge facility which we’re now looking to divest either into a new company or out-license them in terms of utilisation of those assets,” said Lee.

Earlier this year Inion had a setback with the clinical proof of principle study of OptimaPlus, of which NMP is the active ingredient. The trial had to be stopped when five subjects in the Hong Kong arm of the trial experienced inflammatory responses. Subjects in the control arm experienced the same response, indicating the problem was not caused by the product. But the forced ending of the trial left the company still lacking proof that OptimaPlus can reproduce the accelerated bone growth seen in animal models, in humans.

The activity of NMG was discovered by chance through another of Inion’s university collaborations with a group specialising in bone morphogenic proteins at the University of Zurich. NMP was being tested as a plasticiser for improving the handling properties of Inion’s biodegradable polymers, when the unexpected outcome of bone regrowth was detected.

The company will continue its down-scaled R&D at its Finnish facility which currently employs twenty people. The savings from the Cambridge closure, estimated at €1.5 million, will be, “Diverted directly to the setting up of a new sales and marketing structure for the US business,” said Lee.  “We’ve built a team of six people in the US to run a new commercial operation over there.”

The company had cash of €19.2 million at the end of June 2007, down from €35.8 million a year earlier.

In November 2004 Inion became the first Finnish company to have an initial public offering on the main market in London, grossing £33 million to develop OptimaPlus. Before the IPO, Tampere-based Inion had raised €37 million in three rounds following its spin out from of the Technical University of Tampere in 1999.