Third Rock Launches Sage Therapeutics with $35M Series A and Plan to Tackle Brain Diseases

10/18/11Follow @arleneweintraub

Can brain disorders be treated more effectively by fine-tuning key receptors in the brain, rather than turning them completely on or off? That’s the question Boston-based Third Rock Ventures’ latest startup, Sage Therapeutics, hopes to answer with a new class of treatments it is developing to treat diseases such as schizophrenia and depression. Third Rock started Sage today with $35 million and a duo of co-founders who are well known in the neuroscience space: Eli Lilly veteran Steven Paul, who is now the director of the Helen and Robert Appel Alzheimer’s Disease Research Institute at Weill Cornell Medical College in New York, and Douglas Covey, professor of biochemistry at the Washington University School of Medicine in St. Louis.

Sage is developing “allosteric receptor modulators,” which are designed to balance the activity of neurons in the brain. The drugs address neurotransmitters such as GABA and glutamate, which control signals transmitted between neurons. When the receptors that produce these brain chemicals go awry—causing them to be either overly active or not active enough—disorders of the central nervous system can result.

The problem with many drugs on the market today, says Third Rock partner Kevin Starr, is they turn neurotransmitters all the way up or they turn them off all together. “That might not be the best way to restore the natural signaling in the brain,” he says. “You don’t want to hit these receptors over the head. You want to fine-tune them.”

Sage is founded on a proprietary chemistry-based technology that enables the development of novel allosteric receptor “modulators”—drugs designed to tweak their activity rather than just shutting them on or off.

Paul says one project the company is working on involves finding drugs that will boost the glutamate receptor called NMDA, which is believed to be underactive in the brains of patients with schizophrenia. “NMDA was a very active area of research when I was at Lilly,” says Paul (who is also one our New York Xconomists). But findingNMDA-modulating drugs that could be given at a high enough concentration without causing side effects was challenging. Sage’s platform, he says, “will provide a quicker way to optimize compounds that can be made into drugs.”

Paul hopes Sage’s drugs will be able to address more of the symptoms of schizophrenia than current treatments can. Most schizophrenia products treat “positive” symptoms, which include hallucinations and delusions. But they don’t relieve “negative” symptoms, such as the inability to experience pleasure or to carry on normal social interactions. “Negative symptoms are still left basically untreated,” Paul says. “We believe we might be able to address them.”

Steven Paul is the co-founder of Sage Therapeutics.

Sage will face some competition from other companies that are making headway in schizophrenia. Roche has been reporting positive trial results of a drug that targets NMDA receptor functioning by blocking a protein called glycine transporter one (GlyT1). And in September, PureTech Ventures startup Karuna Pharmaceuticals, based in Boston, licensed a group of compounds from Vanderbilt University that also inhibit GlyT1.

Paul says Sage is also looking at finding new ways to modulate GABA—a neurotransmitter that can run low in patients suffering from depression. Many popular antidepressants are benzodiazepines, which enhance GABA but can cause side effects such as drowsiness and decreased libido. What’s more, says Paul, “two-thirds of patients don’t have an optimum response to them.”

Starr says Sage represents “a classic Third Rock approach” to starting companies. The idea came out of conversations with Paul, he says. The firm then went about pulling together some key intellectual property and assets, including, he says, “a series of interesting compounds” developed by co-founder Covey. Third Rock also assembled a large group of advisors for Sage, including Stephen Moss, professor of neuroscience at Tufts University, and David Farb, professor and chair of pharmacology at Boston University School of Medicine.

If all goes well in preclinical trials, Starr expects Sage will have one or two molecules in human testing within two years. All in all, he says, the company has the expertise to go after as many as five major conditions of the central nervous system, including pain and traumatic brain injury. “We believed this would be a great area of science where we could make a difference for patients,” he says of the original concept for the company. “A year and a half later, we’re even more excited.”

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