Sofinnova Ventures’ David Kabakoff, Hybritech Veteran, Sees Promise in San Diego Biotech
One thing I learned on my recent trip to San Diego, is that the local biotech companies usually can’t just drive a couple miles down the road to meet a venture capitalist because they’re clustered to the north in Silicon Valley. So I tracked down Sofinnova Ventures’ David Kabakoff, a prominent VC who actually does make his home in San Diego, to find out from his perch what he thinks are the most intriguing biotech ideas in the local scene.
Kabakoff is pretty easy to find—he’s based upstairs from Biocom, the local biotech trade association, which has gone out of its way to provide convenient office space for VCs. Kabakoff is a familiar face in San Diego biotech, having been the former head of research and development at Hybritech, and later taking on CEO gigs at Corvas International and Salmedix. But Kabakoff, 60, is still relatively new to the venture capital world, having joined Sofinnova in 2007 as an executive-in-residence.
Two companies popped first to his mind—San Diego-based Trius Therapeutics, a maker of a new antibiotic for drug-resistant bacteria, and La Jolla, CA-based Intellikine. I had already met with Trius CEO Jeff Stein to hear that company’s story, so I asked him more about the latter firm.
Intellikine was founded in 2007 by Kevan Shokat, a researcher at the University of California, San Francisco, and Troy Wilson, a San Diego biotech entrepreneur. The company raised $25 million in its Series A round in August 2007, led by Abingworth Management, CMEA Ventures, and Sofinnova. The company set up shop in San Diego because that’s where a couple of the founding chemists were, at the Genomics Institute of the Novartis Research Foundation. The company’s mission is to develop drugs that hit the PI3 kinase pathway that’s implicated in numerous forms of cancer and inflammatory diseases.
“A lot of this is really about people, and where they are, and where they want to stay,” Kabakoff says. “That’s why this is in San Diego, not San Francisco.”
The company is attempting to be a fast-follower behind Seattle-based Calistoga Pharmaceuticals, which is the first to enter clinical trials to hit what’s known as a delta form of the PI3 kinase, Kabakoff says. Drug giant Novartis, and South San Francisco-based Exelixis (NASDAQ: EXEL) also have programs in development to hit this target.
While San Diego benefits from having the headquarters and about 15 employees, about 20 more employees are based in Shanghai, where chemistry can be done more cheaply, he says. Since a couple of the founding chemists, Yi Liu and Pingda Ren, are of Chinese descent, they can communicate very efficiently with the staff back in China, Kabakoff says.
Since there are no approved drugs hitting the PI3 kinase pathway, this is a risky area, and being careful with its pennies is important, Kabakoff says. “It’s risky and expensive,” he says. “Being first-in-class, trying to plow that ground is tough. We like to ask, ‘what can you learn from failures before you?’ Intellikine might still be first in class, but it doesn’t have to be. There can sometimes be an advantage in being a fast follower.”
While Calistoga is in clinical trials, and expects results in mid-2009, Intellikine still expects to be in animal tests, Kabakoff says. Intellikine should enter human tests in 2010, he says.
Before leaving the office, I had to learn a little more about Sofinnova and its philosophy. The firm invests entirely in drug development, not a mix of medical devices, supplies, or other services, Kabakoff says. “We invest in what we know,” he says. “We have people who have done it for years, and we are a clinical stage drug investor.”
Intellikine is a little earlier in development than Sofinnova usually likes, he says. The current $375 million fund is expected to invest in 12 to 15 life sciences companies, with about two-thirds going to that sector, and the rest going toward information technology. Sofinnova likes to take the lead or co-lead in its investments, he says.
Kabakoff’s role is to find new investments and scrutinize contenders. Even though he’s called an executive-in-residence, he’s not planning to come in and take over operations. “I’ve done that. It’s not my goal in life at this point,” he says. I asked later if he’s having fun with the juggling act of handling a half-dozen investments, and he didn’t blink. “I wouldn’t do this if I wasn’t having fun. Having a half-dozen companies to work with is very stimulating. I’m really working as hard as I ever did.”