TheraPei Pharmaceuticals Inc.
This article was originally published in Start Up
Executive Summary
A profile of TheraPei Pharmaceuticals, a start-up developing novel treatments for Type 2 Diabetes.
Alternative targets and novel drugs for diabetes
3595 John Hopkins Court
San Diego CA 92121
Phone: (858) 967-4235
Web Site: www.therapei.com
Contact: John Nestor, PhD, CSO & Founding CEO
Industry Segment: Pharmaceuticals
Business: Novel drug targets for metabolic diseases
Founded: 2004
Founder: John J. Nestor, PhD
Employees: 2
Financing to Date: Undisclosed seed round
Investors: John Nestor; Sequenom, Inc.; WS Investment Co.
Scientific Advisory Board: Edward Dennis, PhD (University of California, San Diego); Charles Cantor, PhD (Sequenom Inc.); Roger Unger, MD (University of Texas Southwestern Medical Center), Robert A. Lewis, MD
Call it the quiet killer. Diabetes, characterized by abnormally high levels of glucose in the blood stream, exacts a vicious toll of its victims. Over time it can lead to heart disease, kidney disease, nerve damage, amputations, and even blindness. The Centers for Disease Control and Prevention now estimates that nearly 21 million Americans have diabetes and another 41 million are pre-diabetic. About 90% of these patients have Type 2 diabetes, in which their bodies are either unable to make sufficient insulin or fail to respond appropriately to the hormone.
Pharmaceutical companies have developed a surfeit of drugs to treat the condition, including blockbusters such as Eli Lilly & Co. /Takeda Pharmaceutical Co. Ltd's pioglitazone (Actos) and GlaxoSmithKline PLC 's rosiglitazone (Avandia), which both garnered sales near $2 billion in 2004. Moving beyond the glitazones, companies are also developing first-in-class agents that don't simply resensitize the body to insulin but that actually alter the way it metabolizes sugars and fats. Amylin Pharmacetuicals Inc. and its partner Lilly, for instance, won approval last year from the Food and Drug Administration for exenatide (Byetta), which mimics the naturally occurring hormone glucagon-like peptide 1 (GLP-1). [See Deal] Other companies could soon provide competing GLP-1 analogs: GSK has partnered with Human Genome Sciences Inc. , while Roche and Sanofi-Aventis ' Aventis SA have deals with Ipsen and Zealand Pharma AS, respectively. [See Deal], [See Deal], [See Deal] Meanwhile, Novartis AG , Merck & Co. Inc. , OSI Pharmaceutical Inc.'s Prosidion Ltd. , and Bristol-Myers Squibb Co. are trying to increase GLP-1 levels via an alternate mechanism, choosing instead to develop drugs that inhibit the enzyme responsible for GLP-1 degradation, a protease called DPP IV.
Clearly, competition in diabetes drug development is intense and is dominated by industry giants. But that doesn't mean that there isn't room for upstarts with novel intellectual property, determination, and, of course, cash, to capitalize on their findings. (See "The Double-edged Sword of Diabetes Drug Development," START-UP, December 2005 (A#2005900233].) Indeed, just a few years ago Amylin was a prime example of one of these brash start-ups. John Nestor, CSO and founder of TheraPei Pharmaceuticals Inc. believes that his company has a fighting chance to become the next Amylin--or at the very least a take-out candidate for a hungry pharmaceutical company.
Founded in 2004, TheraPei is based on IP spun-out of Sequenom Inc. , a Southern California–based biotech that develops tools to identify genomic variations called single nucleotide polymorphisms. A couple of years ago, Nestor joined Sequenom as the EVP of drug discovery. The goal was to use information from the company's genetic association studies in 12 diseases to look for variations that might herald novel drug targets. In a few short months, Nestor and his team identified three attractive targets for diabetes and metabolic syndrome. But because of financing challenges, Sequenom execs weren't able to move forward on their drug discovery plans, and they decided to shut down that branch of the company.
Still, Nestor was convinced that these targets could turn into something big. "They were the most exciting targets I had worked on in 25 years," he says. He persuaded Sequenom to spin out the intellectual property surrounding the targets and the compounds under development into a new entity that became TheraPei. In addition, Sequenom made a seed investment in the fledgling company and took a "modest equity stake" that does not include future royalties.
Currently, TheraPei has four drug discovery programs up and running, three for Type 2 diabetes and one for asthma. Nestor wanted to focus the company's discovery efforts in metabolic diseases like Type 2 diabetes because, as he says, "the treatments currently on the market are palliative and don't address the underlying causes of the disease." New research suggests that abnormally high blood glucose levels are merely a symptom of the disorder rather than an underlying cause of disease. TheraPei is pursuing research suggesting that obesity and elevated fatty acid levels are the real culprits in Type 2 diabetes, ultimately causing a molecular cascade called programmed cell death—or apoptosis--of the insulin-producing beta cells in the pancreas. The core focus of TheraPei, whose name contains the Indo-European root word "pei" for fat, is to develop novel drugs that reverse the toxic effects of lipids.
The company's lead product, TP-107, is an analog of a neuromodulatory peptide called PACAP that is released from nerve endings in the pancreas and that binds to a specific receptor called VPAC2 on the pancreatic beta cells. Activation of its receptor triggers a complex regulatory cascade that results in greater insulin production and a concomitant decrease in blood glucose levels.
Though it works through a different signaling pathway, the ultimate outcome—reduced blood sugar levels—is similar to the events triggered by GLP-1 analogs such as Byetta. But Nestor hopes that his VPAC2 ligands will have advantages over Byetta and other similar medicines. Byetta activity, for instance, peaks two to four hours post-delivery, making it impossible to achieve a once-daily dosing of the medicine. And the Amylin/ Lilly drug is not without side effects: not only does it cause insulin release and satiety, but most patients on Byetta also experience some nausea and vomiting.
Nestor's group, however, designed TP-107 to be a long-acting, highly potent version that, at least in mouse models, exhibited maximal effects eight hours after injection. That should make a once-a-day administration possible, says Nestor. Because the drug has a lower Cmax—or level of maximal blood concentration—side effects should be minimal. But Nestor notes that the full clinical profile of TP-107 won't be known until it's been tested in humans. Amazingly, just three rounds of compound synthesis—and the creation of only seven actual molecules—was necessary to come up with a viable VPAC2 ligand. Nestor has a long history in drug discovery, with three pharmaceuticals currently on the market, and he admits that in this case, "we were pretty sure we knew what to make." The company is awaiting additional funding to advance TP-107 to the clinic.
The company's two other Type 2 diabetes programs are both at earlier stages of development. TheraPei is only beginning to test compounds that appear to inhibit the enzymatic pathway involved in insulin resistance and beta-cell apoptosis. These compounds were engineered based on the structure of a known, but to date undisclosed, natural product that inhibits the apoptosis pathway.
A second project, looking for acetyl-CoA carboxylase 2 (ACC2) inhibitors, is at an even earlier stage. Researchers have long suspected that the ACC2 protein might make a good diabetes drug target because mouse studies show that knocking out the ACC2 gene results in normal mice that continuously burn fat. "The challenge has been finding inhibitors that selectively block ACC2 and we feel that we have strategic advantages here," says Nestor.
According to Nestor, work on TP-107 spawned an unexpected opportunity in asthma. Pharmaceutical companies such as AstraZeneca PLC and Roche have been experimenting with short acting VPAC2 ligands in asthma patients, and clinical trials have shown that these molecules can cause a strong bronchodilation response with potential for anti-inflammatory effects. But companies really want long-acting versions of these molecules. With potent VPAC2 ligands of prolonged duration already in hand for diabetes, Nestor's group decided to optimize two drug development candidates for delivery via inhalation. According to Nestor, these compounds are "patentably distinct" from those of potential competitors that include Bayer AG and Roche. Like TP-107, both asthma candidates are still in preclinical development.
Pharmaceutical companies have apparently taken a keen interest in both TP-107 and the VPAC2 agonist for asthma. Nestor says that TheraPei may partner one program relatively soon and may develop the other through a proof-of-concept Phase IIa study, where "there is an opportunity for a substantially bigger deal." No decision has yet been made on which program will be out-licensed first, though Nestor believes that asthma drug development may be easier for a start-up company of TheraPei's size. Meanwhile, monies from any partnering deals and additional fundraising efforts will be used to take the apoptosis inhibitor and the ACC2 inhibitor programs from drug discovery to late clinical development or NDA.
For now, Nestor is focused on telling TheraPei's story to potential venture backers. TheraPei is seeking to raise a Series A round of about $10 million in the coming months to advance the lead compounds into the clinic. Because the company is being run in virtual mode, using CROs for synthesis and bioassays, the burn rate has been relatively low to date. But Nestor is prepared to ramp up quickly to take advantage of the novelty of the company's compounds, and he anticipates that he can build TheraPei into either a public company or an acquisition candidate in just four years with only two rounds of funding.
Pharmaceutical companies have certainly shown an increased appetite for early-stage targets, and with diabetes reaching epidemic proportions in the US and other developed nations, TheraPei appears well placed to build on its early success.—EFL