Every year, hundreds of billions of dollars are wasted by healthcare on ineffective prescription drugs. What if you could predict the drugs that would get the correct patient responses?
Scipher Medicine, a precision immunology company based in Boston, commercializes blood tests that reveal a patient’s unique molecular disease signature and match that signature to the most effective therapy, ensuring optimal treatment from day one. Their molecular signature test—PrismRA—helps identify rheumatoid arthritis patients who are unlikely to adequately respond to TNFi therapy, the world’s largest selling drug class, so that non-responders can be prescribed a more effective alternative treatment.
Based on the human interactome—a reference map of the protein-protein interactions network—created by co-founders Joe Loscalzo, PhD, and Albert-Laszlo Barabasi, PhD, Scipher Medicine partners with payers, providers, and pharma along the healthcare value chain to bring precision medicine to autoimmune diseases. The unprecedented amount of patient molecular data generated from these tests drives Scipher Medicine to discover and develop novel and more effective therapeutics.
To date, the company has raised $117 million. Last March, Scipher announced the completion of its Series C financing led by aMoon and Northpond Ventures, with participation from Echo Health Ventures and existing investors Khosla Ventures and Alumni Ventures.
GEN Edge spoke to CEO Alif Saleh to discuss how Scipher Medicine decided to leverage their proprietary Spectra Network Biology platform and artificial intelligence to address wasted spending on ineffective prescription drugs to timing when a company should go public.
GEN Edge: Alif, can you tell us about Scipher’s founding mission and vision?
Saleh: Scipher spun out of a collaboration between Northeastern University, Harvard Medical School, and Brigham and Women’s Hospital in Boston around a platform very astute at identifying a patient’s disease signature based on gene or protein expression data. With that signature, we can predict which drug a patient would respond to before therapies are prescribed. We went out into the healthcare system at large and asked a blue-sky question: “If you can predict drug response, any drug, any disease, what would you want to have?” We talked to some of the largest provider networks in the country, patient advocacy groups, insurance companies, and pharmaceutical companies.
The feedback was rather remarkable. Almost every large stakeholder said the same thing: anti-TNF therapy and auto-immunity are completely underserved, both the precision medicine tools and solutions. Auto-immune diseases are the most significant driver of specialty drug spending in our country, the largest driver of healthcare costs. One of the main contributors to specialty drug spending is prescribing drugs that don’t work. The biggest drug class in the world—anti-TNF drugs, which include Humira, Remicade, and Enbrel—is costing us $33 billion a year, $20 billion of which is a pure waste because it’s being prescribed to patients without any clinical benefit! This is one of the biggest problems we have in our healthcare system. That’s why we decided to park ourselves there.
Our founding mission was to go after large blockbuster drugs with low response rates that are expensive and where prices keep increasing every year. We develop “molecular signature tests” that predict who will respond to those drugs. At a societal level, we’ve identified a gap in the market where, beyond the FDA making sure drugs are safe and show some degree of efficacy, there is no other body that holds the healthcare system accountable to prescribing drugs that work versus drugs that don’t work.
We are rolling out a battery of tests. We launched one test last year called PrismRA, and we’re going to launch one test every year for the next five years that address some of the most prominent drugs in the world that are expensive but have low response rates.
Everybody’s aware of this problem. Some people are incentivized to solve it, others are disincentivized to solve it. The lack of response to these massive blockbuster drugs is crazy. The fact that we’ve ended up in a healthcare system where a manufacturer is allowed to market a therapy to patients where the majority of patients don’t have a clinical benefit from that drug is a problem. There are plenty of other more effective and cheaper drugs available. But these blockbuster drugs that we see on TV every night advertising are dominating, and for the wrong reasons. We felt that somebody needs to solve that problem, so we decided to go after it.
GEN Edge: Scipher was founded in 2013. What has been the company’s journey since its inception?
Saleh: The journey has been around looking for significant problems in our healthcare system and solving those problems with a very versatile platform. This platform took ten years to develop academically. As leaders of the organization, we have the responsibility to use the platform to address a big, hairy problem that will generate clinical and financial savings or benefits to the entire system if solved.
The journey has very much been about finding that problem statement and then aggressively, in a very focused way, going after it without getting diluted with ten other things that the platform can do. We’re being approached by different potential collaborators every month, wanting to take this platform into many different areas. So far, we’ve resisted and stayed true to our focus of predicting response to anti-TNF drugs.
GEN Edge: What is Scipher’s strategy regarding partnerships?
Saleh: We roll out these molecular signature tests that help providers and payers stratify the patient biologically and then treat accordingly. We’ve learned that the molecular data coming from tested patients coupled with clinical outcomes data—we scrape electrical medical record (EMR) data from tested patients with consent—is very valuable. This is now growing into one of the largest data lakes for autoimmune diseases in the entire world. The insight into those data can be sold or used to partner with pharma.
Our testing business addresses drugs already in the market to drive significant data creation, which then helps pharma in discovery and preclinical to develop drugs that target autoimmune diseases. We have an announced deal with Galapagos in autoimmune diseases, where we are selling them novel drug targets or partnering around novel drug targets identified in our data. We have a pretty robust pipeline on the payer and the provider side—United Health, Optum, Echo Health Ventures, and Cambia are investors.
GEN Edge: What regulatory interactions has Scipher Medicine had?
Saleh: Our tests are launched as laboratory developed tests (LDTs), where you don’t need FDA direction as long as you run all the tests in a central laboratory, which we do. We will start to gear up for several FDA conversations around precision medicine in autoimmune diseases. It’s like what happened in oncology 10–15 years ago, when people started to sequence genes, characterize and stratify according to genetic mutations, and treat accordingly. This resulted in a massive wave of innovation in oncology. This is now possible for autoimmunity, and there needs to be a dialogue with the FDA around this. I think we are probably a year away.
GEN Edge: Can these solutions be sold worldwide?
Saleh: We can sell the test anywhere in the world. In Europe, we would need a CE mark, which isn’t that difficult. We would not need the equivalent of FDA approval in Europe. We’ve started a project to scope out a European business model, but right now, all the focus is on the United States.
GEN Edge: What is the business structure within Scipher?
Saleh: The first piece is the testing business. We have an entire commercial team on the payer development side and the provider marketing and sales side, because you need both if you’re selling tests. There’s a whole commercial machine in the process of being built as we scale up our commercialization.
We have the infrastructure for our data. We have over 25 data scientists in the company. The data lake and all the infrastructure around that is a big component. We are doing some preclinical work to validate what we see computationally, because I think the world is very quickly moving away from computational predictions into only accepting computational prediction coupled with biological data on the drug side. Then we partner with pharma to take it further. We’re not going to get into the clinic with our own drugs.
We’ve hired 30 people in the last eight weeks, and we have 40 open requisitions. We are at 90 people now, and we’re going to grow to about 125–135 people. Finding good people and ensuring that you have a culture that can absorb all this new talent is hard. We’re working hard on both of those.
GEN: What is Scipher Medicine’s charted trajectory?
Saleh: We believe that the company with the most data wins at the end of the day. We’ve seen that in oncology with companies like Foundation Medicine, Guardant Health, and others. We have first-mover status in autoimmunity. We position ourselves to be the precision medicine company in autoimmunity by generating more molecular and clinical data than anybody else. We’re ahead of the curve, and as long as we can stay ahead of the curve, a ton of innovation—both on the diagnostic side and the therapeutic side or the target discovery side—can come out of those data sets. As long as we stay ahead of the field and have more data than anybody else, we’re going to keep growing and generate more sales.
GEN: Is Scipher Medicine going to go public, and, if so, when?
Saleh: There’s this saying that good companies go public when it is best for them, and bad companies go public when the markets are hot. That being said, the markets are red hot, and we are considering potentially going public. The question is the timing, which is more correlated to the fact that the window is open right now and the markets are hot than how we feel about our business. That decision would be solely based on if we feel ready and if going public will be a distraction to focusing on operating the business and not that the markets are hot, leading to a super high valuation.