ProteomTech Inc.
This article was originally published in Start Up
Executive Summary
ProteomTech Inc. has developed a protocol for speeding up the protein refolding process so it can be completed in 24-to-48 hours. It's strategy for generating revenues includes contract manufacturing for the research market, a service business that may one day grow to include manufacture of protein drugs
A three-fold path to profit from protein refolding
5980 Horton Street, Suite 405
Emeryville, CA 94608
Phone: (510) 597-9130
Fax: (510) 601-6751
Contact: Donald A. Hawker, Director of Marketing & Business Development; David Hagebush, Director of Marketing & Business Development (Automated Systems)
Web Site: www.proteomtech-inc.com
Industry Segment: Biotechnology; Services
Business: Automated protein refolding for drug discovery
Founded: April 2001
Founders: Charles Gao, PhD, former President & CEO; Xinli Lin, PhD, EVP & CSO
Employees: 15
Financing to Date: $7 Million
Investors: YB Pharmaceuticals Inc.
Board of Directors: Xiangwu Ye; Jun Bao, Acting CEO; Qiling Dou; Xinli Lin
Scientific Advisory Board: Luyuan Li, PhD (Cornell University); Gary Pitts, PhD (Private Consultant); George M. Church, PhD (Harvard Medical School, Lipper Center); Axel T. Brunger, PhD (Howard Hughes Medical Institute, Stanford Synchrotron Radiation Laboratory)
For a protein to become bioactive, its unique sequence of amino acids must fold into precisely the right three-dimensional structure. An improperly folded protein cannot carry out its intended functions, and when that happens, much harm may ensue. To study both normal and unhealthy protein processes, as well as to develop therapeutic protein compounds, scientists engineer recombinant proteins using E. coli, insect or mammalian systems. The synthetic proteins need to be isolated from the host system. This procedure typically causes as many as three-fourths of the proteins to lose their bioactive conformations. Refolding these clumps of misfolded proteins—so-called "inclusion bodies"—requires that they be dissolved in solution. That step causes the proteins to unwind completely, or "denature."
The denatured proteins must be put through a complex multi-step chemistry to establish just the right conditions in solution to prompt the proteins to refold themselves correctly. Determining those conditions can literally take years of work by highly skilled biochemists. ProteomTech Inc. has developed a protocol for speeding up the refolding process so it can be completed in 24-to-48 hours. The company has a three-fold strategy to generate revenue from its technology.
The company grew out of the work of its EVP and CSO, Xinli Lin, PhD. Lin spent 15 years studying the structure and function of proteins at the Oklahoma Medical Research Foundation (OMRF). While there, he experimented with the chemical conditions that would cause dissolved inclusion bodies to refold into their correct, naturally bioactive conformation. He developed a rapid, standardized step-wise progression, as well as special additives to refolding buffers, that shifts the dissolved inclusion bodies from a high pH solution to a stable low pH solution, followed by purification techniques to arrive at useful quantities of refolded proteins. Using his process, Lin generated enough streptokinase, an anti-thrombolytic, and BACE (beta-secretase), which is a target for Alzheimer's disease therapies, to describe their structures for the first time. With a few million dollars in seed money from Los Angeles-based investors YB Pharmaceuticals Inc., he and Charles Gao, the company's former CEO, launched ProteomTech in 2001. Patent-holder OMRF licensed exclusive rights to the technology to the start-up.
The company began by offering contract services supplying purified refolded proteins to pharmaceutical researchers. Clients provide ProteomTech with either expression plasmids or inclusion bodies, and the company returns the refolded protein, in contracted quantities and purity. According to Don Hawker, ProteomTech's director of marketing and business development, the process has now been tested on several hundred random proteins selected from twenty different protein types. He claims a greater than 80% success rate.
The contract services business may one day expand to manufacture of protein drugs because inclusion bodies processes are scalable. Several therapeutic proteins on the market are manufactured by inclusion body processes, including human growth hormone (HGH), human insulin and alpha-inteferon. With the protein biologics market forecast to grow 15% annually over the next several years, nearly double that of the pharmaceutical industry as a whole, the potential for contract manufacturing is substantial. (See "The Protein Production Challenge," IN VIVO, May 2001 (Also see "The Protein Production Challenge" - In Vivo, 1 May, 2001.).)
The contract services business has already generated a revenue stream. To date, Hawker says, seven of the ten largest pharmaceutical firms, plus a number of biotechs and academic laboratories, have entered into contracts with the company--several for repeat business--for research proteins. He estimates that ProteomTech's contract services for research purposes could eventually bring in $5 million or more annually. "How many biotechs have a chance to become profitable with their core technology?" Hawker asks.
That core technology opened two other paths to much greater potential returns. Drawing on Lin's work on protein structure, the company has established IP for two therapeutic proteins, VEGI (vascular endothelial growth inhibitor), a potential cancer therapeutic and treatment for macular degeneration, and pro-urokinase. The latter molecule is a precursor form of the thrombolytic Abbokinase (urokinase), used to treat pulmonary emboli, which could potentially be more effective in smaller dosages with fewer side effects than the current formulation. (Forced by the FDA to withdraw Abbokinase from the market in 1998 because of manufacturing problems, Abbott Laboratories Inc. successfully relaunched it in late 2002.) ProteomTech has received two SBIR grants for animal studies of the drugs being carried out with SAB member Luyuan Li, PhD, at the University of Pittsburgh Medical Center , and other academic collaborators. Hawker says, "We've seen much interest from Big Pharma and Big Biotech in partnering the proteins. It will be another year before we'll want to partner the programs so we can drive more value into the process." The company has begun meeting with CROs to launch clinical studies later this year.
While ProteomTech has continued to pursue its own drug pipeline, growth in contract services led the company to develop an instrument to automate the arduous process of screening of different refolding conditions. The potential demand for the instrument, known as PTR, seemed large enough to commercialize it as the first automated protein refolding system on the market. The PTR manages the entire pH shift process once an inclusion-body specimen has been dissolved in solution. The system works through a small shotgun approach, testing twenty different chemistries to screen for the optimal conditions for a specific protein, while monitoring and identifying the progression that leads to successful refolding.
The PTR system, which will enter beta testing in pharmaceutical and academic laboratories this spring, should come on the market next fall. Part of the package that comes with the instrument includes supplies of necessary reagents and the proprietary additives to the buffers. While pricing for the system has not been set, David Hagebush, director of marketing and business development for PTR, points out that typical cost for generating a single protein in a laboratory using a mammalian system can top $300,000. The company claims that PTR, which works with an E. coli system, can drive the price down to as little as $1,000 per protein and may take days, not years, to complete. The present market for the instrument is admittedly a "narrow niche," around 200 potential customers. Plans call for development of a version of the instrument appropriate for smaller laboratories. Hagebush projects potential revenues from the PTR of as much as $20 million annually.
A major boost in revenues from either contract services or purchasers of PTR could come if a protein proves of sufficient interest to merit scaled-up production. ProteomTech will then negotiate a licensing deal for the manufacture of the protein, which will include downstream royalties from resulting products. "There's a hot market for new proteins," Hawker says. "Building IP in therapeutic proteins is a potential major source of revenues. Any scale up for manufacturing would be very valuable."
He expects revenues from contract services and PTR sales to help fund the company's in-house drug program. According to Hawker, the company has begun discussion for a possible additional round of venture financing
Currently ProteomTech is also in the hunt for a new CEO. Board of Directors member Jun Bao is acting in that capacity for now. Hawker expects a permanent CEO to be on board by mid 2004.—Marc Wortman