Media Coverage

Aratana is building a platform for the companion animal market, not just for itself

Sep 12, 2017 - Animal Pharm
By Joseph Harvey
Animal Pharm
September 12, 2017

With its commercialization plans afoot, Aratana Therapeutics has come a long way in a short space of time. Animal Pharm editor Joseph Harvey caught up with the firm's founder, president and chief executive Steven St. Peter to find out how competitive the company can be with the market's leading players.

During the recent second-quarter investor calls of Zoetis and Eli Lilly, Aratana's name cropped up – a suggestion the company is making such significant ripples in animal health, it is the talk of the investment community as well.

Steven St. Peter said it was rewarding to hear one of the firm's products mentioned on the most recent Zoetis investor call. The industry leader's chief executive Juan Ramón Alaix mentioned how Galliprant "has been gaining share in this pain market".

However, Dr St. Peter said Aratana is not necessarily aiming to compete directly for market share with Zoetis. He told Animal Pharm: "Obviously, we're happy to take any market share if we do but we are trying to impact the market. We are not always aiming to take market share but instead grow the market."

Some animal health start-ups are solely striving to get a product on the market. Aratana aims to be a much more influential player.

This was not always the case – the firm has changed a lot in a short space of time. Five years ago, Aratana only had approximately a half-dozen employees. One of these was Dr St. Peter, who had just taken the role of chief executive.

"It all started off as a project and that project became a company," he said. Aratana originally had the provisional name VetDevCo until the project began to take off.

"In around 2009 to 2010, biotech was on its back," explained Dr St. Peter. "Then it started to warm up. I was with MPM Capital where we funded the $20 million series A for Aratana. We contacted BioCentury to see if they would cover the funding and they simply said they were not interested in animal health. That was a splash of water in the face."

As with a lot of early-stage businesses in animal health, Aratana began to feel more support from investors following the creation of Zoetis and its launch in 2013.

Dr St. Peter continued: "The animal health sector continued to do well. Zoetis did well. Then, 2013, 2014 and 2015 were good years for biotech. We established ourselves and sustained ourselves."

Aratana copycats?

So far, so good. However, since there was a flurry of animal health companies going public in around 2013, the IPO ship has run aground.

"While I remain excited and confident, one doesn't know how the story will end," Dr St. Peter confessed. "One of the challenges of being a pioneer is when you end up trying to beat other people's expectations. The environment now is definitely not as good as Aratana's time. Until companies deliver, I don't know if the same money will be coming in. With human health you have a tried and true path but with animal health you're articulating a whole new model."

Nevertheless, the human biotech market is never far away from the money. When human biotech is hot, there is hope this will bleed over into the animal biotech space. Just recently, Gilead Sciences agreed to purchase Kite Pharma, an oncology biotech without any approved products, for $11.9bn.

Building blocks in place

Since Animal Pharm's last look at Aratana's commercialization plans earlier this year, the company has continued to cement its brand awareness among vets and distribution representatives.

Aratana believes both Galliprant and Entyce can become blockbuster drugs – products with the potential to record over $100m in annual sales. However, there are only 15 molecules in animal health with this type of sales bracket. This means Aratana's expectations for Galliprant and Entyce would place the young firm in the same league as animal health's majors, which all have companion animal blockbusters in their portfolios.

"We believe Entyce can build the market in the way Apoquel built the atopic dermatitis market and Rimadyl built the osteoarthritis market," said Dr St. Peter. "With Entyce, there is no other FDA-approved appetite stimulant."

He said of developing blockbusters: "It's not a demand problem, it's a supply problem. The market always needs new therapies. We've never hidden from the fact we're building a new model for companion animal therapeutics. 2016 was a special year with the three FDA approvals. Now we hope to bring one therapeutic to market every year."

Previously, animal health's innovation has come from established businesses. The introduction of Aratana and the advent of Apoquel has shaken up the status quo, according to Dr St. Peter.

So finally, to Aratana's share price, which has failed to emulate its post-IPO value. Does this play on Dr St. Peter's mind?

"You won't meet a chief executive of a public company that doesn't think its share price is frustrating. You just have to focus on the business and the execution."

Reprinted with permission of Animal Pharm News




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