Despite all the red ink in investors’ portfolios, there is still venture money out there for big ideas. Boston-based Alnara Pharmaceuticals has snapped up $20 million in a first-round financing to support a novel, untested concept. The company wants to show it can develop biotech drugs that can be given in an oral pill, and that will do their jobs strictly inside the gut, without being absorbed in the bloodstream where they can cause unpredictable side effects.
This idea has attracted some heavy hitters in science and venture capital. The investment was led by Seattle-based Frazier Healthcare Ventures and Boston-based Third Rock Ventures, with additional cash from Bessemer Venture Partners. Alexey Margolin, 55, the former chief scientist at Cambridge, MA-based Altus Pharmaceuticals (NASDAQ: ALTU), has signed on as the founding CEO. The board includes Sirtris Pharmaceuticals CEO Christoph Westphal and his Sirtris co-founder, Rich Aldrich.
Most biotech drugs like Genentech’s bevacizumab (Avastin) or Amgen’s etanercept (Enbrel) are genetically engineered copies of proteins which have to be given intravenously or through injections just under the skin. If they were made as oral pills, they would be destroyed by stomach acid digestion, and never get absorbed throughout the body to do their job, Margolin says. But several companies have been experimenting with oral pill formulations of genetically engineered protein drugs, including his former employer, Altus, Milan, Italy’s Eurand, and Belgium-based Solvay, although none have yet been turned into marketed products, he says.
One appealing aspect is in offering drugs that are more convenient for patients. But these treatments may also have an advantage of working strictly in the gut, without ever getting absorbed into the bloodstream, where they can cause the immune system to mount defensive reactions against them, Margolin says. This opens the door to manufacturing microbial proteins that are foreign to the body, but which may be more effective at mopping up leftover metabolite molecules from say, cholesterol, that aren’t fully chewed up and metabolized by enzymes already in the body. These newer drugs could be designed to mop up oxalate metabolites that build up to form kidney stones, or uric acid metabolites that cause people to come down with gout. Since these drugs never get absorbed and broken down by the kidneys or the liver, they are supposed to perform their action and exit through the stool.
“This is exciting, because it’s really a new paradigm,” Margolin says. “It’s also really a once-in-a-lifetime opportunity to work with people like this.”
Alnara’s work is still at the earliest of stages. There’s no technology license from a university or company yet, but Alnara plans to acquire some licenses while building other proprietary know-how internally, Margolin says. The company hasn’t picked a lead drug candidate or a disease to pursue. Still, the CEO says he nevertheless does hope to bring his first drug into clinical trials in about 18 to 24 months.
Alnara is looking for lab space in the Boston and Cambridge, MA, area, and plans to grow to about 10 employees over the next six months, Margolin says. One of the big early challenges will be finding a management team that’s as talented as the board, he says.
Jamie Topper, a general partner with Frazier Healthcare Ventures and a board member, says the core group of players and the novel concept are two big reasons why his firm decided to invest. Even in a downturn. “Like everybody else, we see the early-stage funding picture is getting tougher, but there are still a lot of novel ideas out there,” he says. Evidently, some are still getting funded.