Patricia F. Fitzpatrick Dimond Ph.D. Technical Editor of Clinical OMICs President of BioInsight Communications
Attracting investors means positioning your firm as a drug developer, not just a tools supplier.
Systems biology service companies have found that selling this technology to big pharma companies and investors is challenging. Some firms, though, that combine the tools of systems biology with unique insights and drug development programs are finding financial backing and development partnerships.
In 2006, privately held VLST reported raising $55 million in a Series B venture financing round. The company was the first to emerge from Accelerator, a life science incubator formed in 2003. Accelerator, with $15 million from MPM Capital, Arch Venture Partners, and Versant Ventures behind it, provides money, management, laboratory space, and the expertise of the Institute for Systems Biology (ISB), a nonprofit organization founded by Leroy Hood, M.D., Ph.D.
Accelerator has launched 12 startups, the latest being cancer-focused Oncofactor last May. David M. Schubert, president and CBO of Accelerator, told GEN that his organization has invested a total of $44.5 million since its inception in 2003. Four companies it originally invested in have gone on to raise over $153 million collectively, he added.
“We are not a conventional venture capital firm. We invest extremely modest amounts of money in very early-stage platform-based companies. The bar has gotten a lot higher these days, but we are still on the lookout for compelling and potentially game-changing technologies. Our recent investment in Oncofactor is a good example of this.”
Dr. Hood defines systems biology as the ability to look at all of the elements in a biological system and to measure their relationships to one another as the system functions in response to biological or genetic perturbations. By elements he means genes, messenger RNA, proteins, protein interactions, and so forth.
None of the companies at Accelerator, including one called Homestead spun out of his own lab, are truly pursuing systems biology, Dr. Hood pointed out.“It’s still too soon. Any company that claims to be in systems biology is doing it on a very marginal basis because we’re just now developing the necessary tools.”
Coupling Sys Bio with Drug R&D
Investors generally take a dim view of systems biology enterprises because they see them as tool companies redux, not firms that will ultimately develop and market drugs. “That’s the noninvestable model,” noted Carl Weissman, president of Accelerator. “That’s what VCs are not interested in—people who are trying to build up some sort of a stacked royalty and services business.”
VLST may represent an investor-friendly hybrid between a company with a systems biology approach to drug discovery and one that can eventually produce a drug pipeline. Like other companies emerging from Accelerator, VLST focuses on doing more with less than the whole systems biology vision. Its platform combines bioinformatics and proteomics and is based on using virulence factors in viral genomes to identify targets for autoimmune and chronic inflammatory diseases.
“Rather than using the traditional approach to what I think of as systems biology, that is, scanning the human genome to discover novel targets for therapeutics, we use bioinformatics to scan viral genomes,” Martin Simonetti, VLST CEO told GEN. “We study viral evolution to help us understand how viruses manipulate the human immune system in such a way that they survive and their host cells survive.”
Instead of starting at the top of the funnel where there are thousands of pathways that can be manipulated in the human immune system, the company starts at the bottom of the funnel, using viruses to help identify critical intervention points and narrow potential targets to the hundreds, Simonetti explains.
The company looks for the biologic consequences of viral protein-host protein interactions, then develops biologics that mimic some or all of the virulence factors’ activities. VLST’s therapeutics use antibody and Fc fusion proteins against cell surface and secreted targets.
VLST’s lead therapeutic candidate, VLST-007, was designed to mimic the interaction between the extracellular domain of the CD47 receptor present on human myeloid cells and its extracellular ligand, signal-regulatory protein α (SIRPα). CD47-Fc binding to SIRPα inhibits activation of these immune system cells. VLST-007 has completed preclinical development, and the firm is seeking a clinical development partner.
Creating Virtual Patients
At the other end of the systems biology enterprise spectrum, an enormous project likely to take 10 years and about $1.5 billion has begun taking shape. The pan-European IT Future of Medicine (ITFoM) is currently vying for funding from the European Future and Emerging Technologies flagship scheme and has already received about €1.5 million (about $2.2 million) in preliminary funding. It aims to create virtual patients—computational models of individual people—that will help specialists create personalized health systems based on patients’ genetic and physiological make-up.
To date over 25 academic institutions and industrial partners with expertise in information and communications technologies (ICT), the life sciences, public health, and medicine have initiated the project. The ITFoM consortium, headed by the Max Planck Society in Germany, intends to expand to include new affiliates as work progresses. ITFoM held its kick-off meeting in Amsterdam last May.
The ultimate goals of this systems biology collaboration, according to ITFoM, are to provide each patient’s doctor with a virtual physiological human, giving physicians the power to analyze a person’s human genome at every stage of disease management. The project will require nothing short of a revolution in ICT technologies so that relevant computing, storage, networking, and modeling technologies are developed.
Less massive, more practical marketable companies with comprehensive platforms that don’t require revolutions will command funding from investors. These companies will find that they can gain enough information by leveraging multiple, integrated technologies. Armed with just the right insights, they may be in the position to develop novel therapeutics based on a completely practical approach to systems biology.
Patricia F. Dimond, Ph.D. ([email protected]), is a principal at BioInsight Consulting.