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Shela Marie L.


2011 18064

Onyvax Why did it have to close down?

Onyvax is a privately held company in the field of biotechnology founded by Dr. Anthony Ian
Walker and Dr. Angus George Dalgleish in 1997. It is formerly known as Pearlmark Enterprises Limited
and changed its name in February 1996. It focuses on harnessing the selective power of the immune
system to target and destroy cancer cells. The immune system is also capable of destroying large
masses of tissues as exemplified when the human body rejects organ transplants. Since the products of
Onyvax are specified for cancer cells, there are less off-target side effects while still being effective.
Specifically, Onyvax specializes on the production of cell vaccines. Generally, cancer cells are able to
evade and suppress the immune system. However, recent developments have enabled the identification
of markers (or antigens) on the cancer cells which allow the immune system to elicit an immune response
and target the cancer cells for destruction. Onyvax has three leading products with the leading product for
prostate cancer, Onyvax-P, supposedly due to enter later stages of development. However, these
products were already pulled out from clinical trials due to reasons that will be discussed later (Onyvax,
Since there is an increasing incidence of patients suffering from cancer and due in part to the
limitations of conventional therapies, it is clear that Onyvax was addressing an unmet need with a broad
market. There are approximately 467,000 new cases of prostate cancer diagnosed per year. Indeed, it
has been determined that an increase of 25% in prostate cancer cases occurred from 1995 to 2000.
Meanwhile, there are hundreds of thousands of cases of ovarian cancer, another target of one of the
products of Onyvax, are present every year. Technically, Onyvax prioritizes on acquiring other clinical or
pre-cilinical stage drugs which are affiliated to the companys portfolio and is very much interested in
creating partnerships for its products, especially on Onyvax-P and Onyvax-105 (Onyvax, 2009).
Even from the beginning, Onyvax already had venture financing and multiple partnerships with
other biotechnology companies. It was able to attract, in fact, a high profile of international investors,
coming up with a total of 32 million equity at the start. In addition, its institutional shareholders include 3i
Group Plc, S.R. One, Limited, Merlin Biosciences Fund, Alice Ventures, Alta Berkeley Venture Partners
and PS Wallenberg Trust. The management of Onyvax also consists of people well-renowned and
experienced in the field of biotechnology industry. Onyvaxs chief executive, Dr. Anthony Walker, has ten
years of experience as a management consultant, specialising in the pharmaceutical and biotechnology
industries while Professor Angus Dalgleish, the research director of the company, is the foundation
chairperson of Clinical Oncology at St. Georges Hospital Medical School. Aside from that, he contributed
significant development in the field of AIDS and cancer vaccines (Onyvax, 2009).
Initially, the net worth of the company has a negative net worth due to the fact that its products
are still in clinical trials (DueDil, n.d.). However, it should be noted that there had been an abrupt
decrease in the value of its assets, accompanied by a continuous declination in its net worth in 2008 even
when Onyvax-P has already reached phase II clinical trials (Refer to Table 1, Appendix). What could have
contributed to these?
There are numerous possible reasons as to why the assets of Onyvax continued to decline.
Generally, failures of high profile late-stage therapeutic cancer treatments are an observable trend.
Commonly considered explanations for these include leaving the cancer too late, targeting the wrong
cancer, unhealthy immune system, inhibitory adjuvants and the issue of investor confidence (Pantginis &
Gregorek, 2008).
Though Onyvax received 1.8 million three year Technology Strategy Board (TSB) funded project
had been granted to Onyvax, the phase II clinical trials of Onyvax-P was not deemed as good enough,
prompting investors to discontinue the funding. This resulted to Onyvax becoming insolvent and Onyvax
was forced to look for industrial partners that are interested in taking on the remainder of the research

program. In addition to that, another cancer treatment, the Provenge by Dendreon, has already been
applied for as a cancer treatment, making Onyvax-P less sought after. However, the downfall of Onyvax
could also be attributed to the fact that investors had been impatient. As stated by Dr. Angus Dalgleish,
Onyvax-P could have out-performed Dendreons Provenge had investors had the confidence to set store
in the predicted nine-month survival rates. However, contrary to what is favorable to Onyvax-P
development, the investors pulled out after Onyvax produced results at par only with Provenge. Provenge
also underwent a "melt up", bringing with it other biotechnology companies. The fact that biotechnology
companies are in the middle of a perfect storm could also have affected the marketing and acquisition
strategies of Onyvax. The perfect storm pertains to the global financial crisis of 2008 wherein venture
capitals were reduced resulting to lack of funds of biotechnology companies for the succeeding 6 to 12
months. Hence, 11 biotechnology companies have already filed for bankruptcy as the financial crisis can
affect small companies such as Onyvax (Karberg, 2009).
Aside from these reasons, the management of Onyvax had succumbed to the leverage of finance
or funding wherein a company buys assets using borrowed funds in the hopes that the income from the
asset will be larger than the borrowed money. Of course, it follows that the risk of actually having larger
borrowed money than the income of the asset is present which will result to incurring losses. And this is
exactly what happened with Onyvax. Thus, the company also increased its liabilities in the end. Onyvax
also only has a limited intellectual properties and services, with its scope usually within prostate cancer
only. This means that the income for the company is also unstable (EPSRC, 2012).
Summarizing the factors presented, Onyvax will eventually become bankrupt and indeed, this is
what happened. The lack of investors to continue the clinical trials and development of the cancer
vaccines, as well as lack of funds to pay off debts, led to its demise. Shortly after that, VaxOnco Inc
announced its acquisition of rights to the Onyvax-P cell vaccines and Onyvax applied for bankruptcy
(Onyvax, 2009).
DueDil. (n.d.). Onyvax Limited. Financial statement of in West Yorkshire. Retrieved September 29, 2014,
EPSRC. (2012). UCL Innovative Manufacturing Research Centre. Engineering and Physical Sciences
Research Council. Retrieved September 30, 2014, from
Karberg, S. (2009). Biotech's Perfect Storm. Cell, 138(3), 413-415.
Onyvax. (2009). Onyvax - Cancer Vaccines. Onyvax - Cancer Vaccines. Retrieved September 29, 2014,
Pantginis, J., & Gregorek, L. (2008). The state of cancer immunotherapy: pivotal times ahead. Canaccord
Adams: Equity Search, 128, 1-117.

TABLE 1. The net worth of Onyvax from 1999 until 2008. The changes in the net worth from 1999
to 2008 is tabulated in the graph (DueDil, n.d.).
Net Worth