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Community Technology Fund positions spin-offs to reshape drug industry

By David J. Craig

About 10 years ago, David Farb had a hunch that a novel procedure he had fashioned in his BU laboratory to identify a compound involved in disorders of the central nervous system could "turn the drug-screening business upside down" if implemented on a large scale.
 
  David Farb Photo by Vernon Doucette
 

But Farb, a School of Medicine pharmacology professor and chairman of the department, had neither the time nor the business expertise to commercialize the invention on his own. So in 1995 he teamed up with BU's Community Technology Fund (CTF), which helps BU researchers identify valuable intellectual property, links them with investors and management professionals, and receives equity in resulting spin-off companies. After several years of tweaking his technology and developing a business plan, Farb launched Scion Pharmaceuticals last May. By licensing out its technology, he says, Scion will enable pharmaceutical companies to analyze "hundreds or thousands of new compounds per day, rather than 10 to 20 per week."

In addition to Scion, CTF recently helped two other companies get off the ground. Arradial, Inc., and Symphogen have completed major funding rounds and soon will introduce products. CTF, which secured equity positions for BU in all three companies, has been midwife to about 25 faculty spin-off companies since its creation in 1975, and 10 more companies are currently in its incubator.

"Besides being in concert with the entrepreneurial spirit of Boston University, we're convinced that enabling faculty start-ups helps attract and retain top-quality faculty," says Matt Burns, CTF's managing director. "And this activity is not just about bringing financial gain to the faculty and to the University; it also has a humanitarian aspect. We're taking knowledge off the shelf and moving it into the marketplace, where it can be used to cure a disease."

Curative drug screening
Scientists have known for decades that many cardiovascular and central nervous system disorders involve the malfunction of ion channels -- tiny proteins that poke through cell membranes and determine how much potassium, sodium, and other ions flow in and out, thus controlling electrical activity within cells. But in the past 20 years, Farb says, there have been no major advances in the technology for screening drugs that target ion channels. The typical staff of 10 highly skilled electrophysiologists at a major pharmaceutical company can screen only 10 to 20 such compounds a week, he says, through a laborious process that involves holding constant a cell's electrical charge with microscopic electronic tools, and then monitoring changes in ion flow when a drug candidate is delivered to the cell.

But Scion's keystone technology, the high-throughput electrophysiology (HTEP) device BU patented in 1995, "takes what is considered the gold standard of drug screening and for the first time automates it," Farb says. "We can replace the entire electrophysiology screening division of a pharmaceutical company with an apparatus that can be operated with lesser skilled scientists."

HTEP -- a marvel of biomedical, electrical, mechanical, and computer engineering -- in addition to being much quicker, Farb says, is more reliable than traditional electrophysiological screening methods. "We think we can double the success rate of drug candidates that get to clinical trials," he says. "Considering that new drugs today can cost $500 million to develop, that makes for huge industry-wide savings."

The apparatus also is "a major step in the direction of developing drug therapies that offer curative, rather than symptomatic, treatment," Farb says, because it tests compounds that impact cell chemistry, which represents the "next great frontier in drug discovery."
 

Allyn Hubbard Photo by Kalman Zabarsky

  
 

Last year, the Medford, Mass.- based Scion raised $4 million in its first round of financing, with the Boston venture capital firm Oxford Bioscience Partners as the lead investor; it currently is preparing to close its second round of financing. The company has a staff of 10 and recently purchased 65 key patents related to ion channels from CeNuS, a British drug development company.

Scion also is developing its own line of compounds that target ion channels, says Farb, who is the company's chief scientific advisor and a member of its board of directors. The first drugs to come out of this research likely will be for treating heart arrhythmia and nervous disorders such as epilepsy and anxiety.

Smarter antibodies
At a Boston technology transfer conference two years ago, Jacqueline Sharon, a School of Medicine professor of pathology and laboratory medicine, seemed to get off to a slow start pitching to entrepreneurs her method for cloning antibodies. "The event wasn't very well-organized, and Dr. Sharon was one of the first to speak on the first morning -- to about five people," remembers Ashley Stevens, director of CTF's Office of Technology Transfer, who had been working closely with Sharon for years to secure patents. "Fortunately, it took only one."

Among the handful of people in Sharon's audience was a Danish businessman who was one of a group of entrepreneurs and investors searching for a novel antibody technology to build their young company around. He met with Sharon and Stevens later that day, and the company, having pocketed its first key piece of intellectual property, soon was renamed Symphogen; based in Copenhagen, Denmark, it now employs 25 people. Symphogen raised $15 million last year to further develop Sharon's new method for producing antibodies that mimic how the human immune system attacks foreign, or disease, cells in the body.

The polyclonal antibodies that Sharon clones -- by isolating the genetic information that encodes the structures they use to bind to foreign cells in the body -- are found in the blood, but currently cannot be produced in large quantities. Developing polyclonal antibodies is important for the treatment of infectious diseases, Sharon says, because they can spot several identifying structural characteristics on a foreign cell, whereas conventional monoclonal antibodies are designed to pinpoint a single distinguishing mark, and therefore are easily tricked by cell mutations.

Polyclonal antibodies also are more discriminating, because the immune system's effector cells -- those that actually attack cells marked by antibodies as intruders -- will go after only cells whose surfaces are marked very densely. "Because polyclonal antibodies search out and mark a number of structures on a foreign cell instead of just one, they're better at activating effector functions," says Sharon, who is on Symphogen's scientific advisory board. "A monoclonal antibody that coats only one type of structure on a cell, on the other hand, might not activate the effector cells because the immune system is very careful to not make mistakes. You don't want a trigger-happy immune system."

Quicker cherry picker
Many faculty spin-offs result from years of brainstorming among professors about how to commercialize the fruits of their research. But Arradial, Inc., was formed after a major drug maker courted Allyn Hubbard. "A former student of mine who worked at Alexion Pharmaceuticals told them that I was the guy to solve a project they had," says Hubbard, a College of Engineering professor of biomedical engineering and electrical and computer engineering.
 
  Jacqueline Sharon Photo by Albert L'Étoile
 

So Hubbard and his former student, Samesh Kale (ENG'96,'00), working on an Alexion research grant, developed a robotic drug-screening device for the New Haven, Conn., company. Compared to traditional screening equipment, it can perform more chemical tests, or assays, each time it is loaded, or "reformatted," because the samples it contains are much smaller than those examined with conventional equipment. The invention, which BU and Alexion copatented in 1998, features a tiny arm that moves over a rotating diskette filled with thousands of compound samples -- each a few thousand-millionths of a liter in volume. Alexion, which now controls the patent, licensed the rights to the technology to Arradial, which was founded in 2000 by Hubbard, Kale, and P. Thomas Vogel, an entrepreneur they met through CTF. Vogel in turn linked them with Oxford Biosciences Partners, which led to Arradial's seed round of funding last year. Arradial recently named Mark Tepper, former vice president of the Serono Pharmaceutical Research Institute, as CEO.

The technology's greatest advance, Hubbard says, is the efficiency with which it allows scientists to identify how many "hits" they have -- that is, how many of their target chemicals react as intended when a novel compound is administered -- on the second and subsequent rounds of a drug screening. Called "cherry picking," these laborious follow-up assays fine-tune the results of an initial screening, determining, for instance, exactly what concentration of a potential drug is required to make a target chemical react in a certain way.

"The basic idea behind the device," says Hubbard, "is that while it is fairly difficult to load, once you do, it's like what Confederates said about the Henry rifle -- you load in the morning and it shoots all day. Conceivably, it could be used on an experiment for months without being reloaded, as it has random access memory capability, which allows it to do cherry picking on the fly. It also has its own refrigeration system, which eliminates a lot of trips that technicians usually make back and forth from a refrigerator with cartfuls of chemicals."

Arradial soon could license out the use of its drug screening technology to pharmaceutical companies or enter partnerships to develop new therapeutics, says Hubbard, who works as a consultant to Arradial one day a month.

"Sometimes a piece of technology comes through the Office of Technology Transfer that is strong enough that we can patent it and take it directly to a venture capital firm and raise financing for it," says Terry Brennan, director of new ventures for CTF. "In other cases, either the market isn't quite right for it to get venture capital financing or something isn't quite perfect on the technology side -- maybe the intellectual property isn't strong enough, the management associated with the company isn't yet strong enough, or maybe the technology doesn't quite have proof of concept yet, so there needs to be a little more research spending before we can get financing. With Arradial, it took only four years from the time we helped put together the sponsored research agreement with Alexion to develop the technology until the company was ready to spin out."
       



12 April 2002
Boston University
Office of University Relations