World shaper of tomorrow: Covagen addresses unmet medical needs with novel protein therapeutics

Seven years after incorporation, Covagen—the Zurich-based biotech company that developed a novel class of protein therapeutics— was acquired by Johnson & Johnson, in what is said to be the largest acquisition in Europe in 2014. Covagen co-founder and former CSO Dr. Dragan Grabulovski told us about Covagen’s journey from idea to exit.

To further practice their entrepreneurial skills, Julian joined the Venture Leaders program before he and Dragan founded Covagen in 2007—while Dragan was still studying at ETH. “We had 15 minutes to come up with a name for our startup,” said Dragan. “Covagen is derived from the word covalent, which refers to one of the technologies—covalent DNA display—we were initially commercializing. We then added gen to sound like a real biotech company.” 
 

“We had 15 minutes to come up with a name for our startup.” – Dr. Dragan Grabulovski

From fundraising to validation to acquisition
“As a biotech company, you need to secure the funding to become a clinical-stage company as quickly as possible. Along the way, external validation through pharma companies as collaboration partners is also a very important milestone,” said Dragan. Covagen raised CHF 60 million and closed deals with Roche and Mitsubishi Tanabe from Japan. The external validation went one step further in 2014: “We initially had six companies that were interested in acquiring us, which was certainly very rewarding for the whole Covagen team,” explained Dragan. Johnson & Johnson eventually won the bidding war.

Sharing his expertise
After the acquisition, Dragan stayed with Covagen for almost a year: “I left because I wanted a time-out to do something else after eight years at Covagen,” said Dragan. “Usually, when a C-level person leaves, they ask if you want to become a consultant— which is what I ended up doing for Covagen.” The time-out was not just to relax; it was also the beginning of Dragan’s second career: He founded his own consultancy company to advise venture capitalists and biotech companies like Biomunex (France). He also became a board member of Memo Therapeutics and Microcaps and started coaching talents at ETH Zurich and sharing his experience in the Innosuisse startup training sessions. 
Julian stayed with Covagen and Johnson & Johnson, where he now leads the external innovation of the Discovery, Product Development & Supply (DPDS) organization of Janssen R&D. Julian and Dragan regularly meet with other former Covagen team members—for dinner and wine.
 

“As a scientist, I thought for a long time that if I publish something, people will read it and be excited about it. In reality, you need to do a lot more for people to notice you.” – Dr. Dragan Grabulovski 

Putting the advice into practice
Even though Covagen’s exit process went smoothly, Dragan learned an important lesson that he passes on to the students and entrepreneurs he is supporting: “One thing that I’d do differently is probably to start earlier and more heavily with advertising the company and its technology. No matter what stage, just go out and talk about your idea. Avoid that you set up everything and find out that nobody is interested.” Dragan has the chance to put this advice into practice: In 2019, he co-founded Araris Biotech AG, a biotech startup that builds antibody-drug conjugates (ADCs), was stress-tested by winning Venture Kick, and raised CHF 15.2 million in a Seed round in October 2020. 


 

About "World shapers of tomorrow: Startups building our future"

The TOP 100 book "World shapers of tomorrow: Startups building our future" shows the impact of the TOP 100 Swiss Startups over the last 10 years. On 100 pages, the publication features the facts and figures about the startup ecosystem in Switzerland, shows the sectors and geographic distribution, and lists the investors behind Swiss deeptech startups. The book also highlights disruptive companies that changed their industry: Beekeeper, Bestmile, Climeworks, Covagen, DeinDeal, Doodle, GetYourGuide, MindMaze, Scandit, and Piavita. The founders of these startups share anecdotes and discuss their successes, lessons learned, and visions for the future. A selection of 10 verticals illustrates how Swiss deeptech startups transform our lives and help us build a better and more sustainable future in relation to health, longevity, digitalization, and decentralization. Learn more and download your copy at www.top100startups.swiss/10years.

Get your copy: PAPERBACK VERSION HARDCOVER VERSION EBOOK VERSION AMAZON KINDLE