Start-Ups with Predictive ADME/Tox Technologies
This article was originally published in Start Up
Executive Summary
Ask a head of R&D for a pharma or biotech to name the area where the need for new and better tools is greatest, and likely as not the answer will be predictive modeling of a drug's ADME/Tox profile. There's an abundance of sweet spots across the preclinical landscape for companies with better models and predictive tools.
There are sweet spots across the preclinical landscape for firms with better models and predictive tools
Ask a head of R&D for a pharma or biotech to name the area where the need for new and better tools is greatest, and likely as not the answer will be predictive modeling of a drug's ADME/Tox profile--the determination of how a compound will be absorbed, distributed, metabolized, and excreted, and its potential toxicities in the body. The rough numbers are that of the more than 80% of drug candidates that do not succeed in clinical trials, 30-40% of those fail because of liver toxicity alone. And no wonder: as Carolyn Kahn, PhD, president and CEO of Hepaticus Inc. notes, tox groups are still using models that are only 50% effective. Moreover, in vivo studies may take a year, and costs run into the millions of dollars.
It's an issue with potential solutions that range across the preclinical landscape, with an abundance of sweet spots for start-ups with innovative technology: in silico modeling for ab initio drug design, databases and algorithms for analyzing macromolecule structures, better in vitro systems for early ADME/Tox assessments, and even animal models that yield more and better information about disease processes—for years, a bugaboo for preclinical R&D and an ongoing lament by clinicians who see drugs that look promising in animal models so frequently fail in humans. And thanks largely to genomics and the impetus of the Human Genome Project, the industry now appreciates the need for computational biology, to standardize and manage the data flow from high-throughput screens and sequencers.
Indeed, while the genomics revolution of the last decade may thus far have failed to improve R&D productivity or improve the success rates in drug development (half of the ostensibly genomics-"validated" compounds still don't work, notes one VC), unquestionably, the endeavor has produced an entire generation of tools. These include microarrays and also high-throughput sequencing, which provides much of the genomic content for the arrays, new ways to visualize and map molecular interactions at the atomic level, as well as the sophisticated bioinformatics tools required for the integration, annotation, and analysis of the data that is generated.
Several of the genomics companies that in the 1990s pioneered the development of high-throughput methods for genomic analyses, notably CuraGen Corp. (See "Genotyping and the High-Throughput Legacy," START-UP, July/August 2000 (Also see "Genotyping and the High-Throughput Legacy" - Scrip, 1 Jul, 2000.)) and Gene Logic Inc. , became service providers in the ADME/Tox area. Like many platform technology companies, they leveraged the value of their tools as they built internal drug development capabilities. CuraGen has largely moved away from that business as it identified and began development of drug candidates for its own (and its partners') account. Gene Logic, however, has stayed the course as a service provider. It still focuses on providing information and bioinformatics analysis, but more recently, the firm expanded its drug discovery and development services, which include primarily preclinical safety and pharmacology study services and related lab services. Of its $69.5 million of revenues in 2003, 25% came from contract study services (largely due to its acquisition of a CRO, TherImmune Research Corp.)—a percentage Gene Logic says it expects will increase this year.
The four companies profiled below reflect a range of technologies that can be applied to the task of predictive ADME/Tox, as well as a range of business models. Qualyst Inc. , for example, has devised an in vitro assay system for estimating biliary excretion and hepatic uptake using cultured hepatocytes. The company has honed its plan to focus on novel ADME and toxicology technologies grounded in solid IP, giving the company both freedom to operate and a licensable suite of technologies--not a service model per se, but a licensing model for technology development and transfer to drug developers, according to president and CEO Scott Neuville. Medisyn Technologies Inc. can predict the properties of a compound by comparing its topological features with those of a known-to-be-active reference compound—a technology it uses for internal drug design and development and also for ADME/Tox profiling (among other things) for partners. QuantumBio Inc. has an in silico platform it will sell directly to customers: in its case, a structure-based set of design tools that promise better predictability of chemical and physical properties forvirtual screening, QSAR, ADME/Tox, lead optimization, and docking. Finally, PhysioGenix Inc. has a panel of engineered rats that it offers customers for everything from target identification to ADME/Tox profiling.
In addition to their common interest in the preclincial ADME/Tox space, the four companies share another feature: none has raised more than $3 million. Even for those firms that are pursuing internal drug development, such as Medisyn, the nature of their technologies offers a relatively fast route to a revenue stream. Notes Jonathan MacQuitty, PhD, of Abingworth Management: "Some of the best returns in our portfolio are enabling technology plays, because they require less investment capital" to launch.--MLR