Ambrx Aims to Create New Breed of Custom-Built Biotech Drugs

12/8/08Follow @xconomy

One thing I love about our new Xconomy San Diego office: I could practically shout out the window and get the attention of one of the fastest-growing private biotech companies in the region, Ambrx. (Although I bet the landlord, Alexandria Real Estate Equities, wouldn’t take too kindly.)

I actually scheduled a meeting with Ambrx CEO Steve Kaldor in a more civilized fashion, via email. He’s been on my list for a while, since he’s running one of the few private biotechs sitting on a pile of $55 million in cash, and has the luxury of research support from four partnerships with Big Pharma companies.

The Ambrx story began in 2003. That’s when Peter Schultz, the director of the Genomics Institute of the Novartis Research Foundation (and the founder of eight biotech companies) had a new idea for creating new amino acid building blocks for a different class of biotech drugs. These drugs could potentially do whatever you wanted, like last longer in the body, or carry potent cell-killing agents if need be. The vision is apparently catching on. Ambrx has raised $96 million in venture capital, hired 80 employees, created at least 11 drug candidates, and signed two partnerships with Eli Lilly, and one each with Merck and Merck KGaA of Germany to help fill up their pipelines with promising new products in development.

“The world seems to be beating a path to our door,” Kaldor says. “We feel we’re part of the next generation of therapeutics.”

Before we get too carried away, it must be noted that none of Ambrx’s newly-engineered protein drugs have navigated the perilous seas of advanced clinical trials. Frankly, it still needs to settle on what it wants to be when it grows up—a research and development shop for Big Pharma, or a fully-integrated biotech company that discovers, develops, and sells its own products.

With any unproven technology heralded to have broad potential, management execution on its top one or two candidates is critical. So Kaldor walked me through the opportunities he sees for the company’s lead candidate, ARX-201, a modified form of human growth hormone, which Ambrx is developing with Merck KGaA of Germany.

The first-generation HGH drugs, usually taken by short children (or occasionally a venal pro athlete looking for an edge) have to be taken daily by injection. The Ambrx drug is engineered to be taken as a once-weekly shot, which offers greater convenience to patients. A preliminary study of 22 patients, released at a medical meeting last month, showed it was safe and able to raise the amount of a growth factor protein in the blood. If this can be proven in more rigorous studies to come, Ambrx and Merck KGaA could grab the bulk of this $1 billion a year market.

Along this same theme, of engineering existing biotech drugs so they can be taken in fewer shots, Ambrx is developing another drug for multiple sclerosis. The existing treatments, standard interferon-beta drugs, generally must be given as several shots a week. Kaldor says Ambrx wants to see if it can be done in a shot every other week, so that patients are more likely to stick with their medication. This represents another huge business opportunity, since these MS drugs generate some $3.5 billion a year in annual sales. Ambrx is facing some competition in this space from Seattle-based Allozyne, although Kaldor says his company has a head start of four or five years. “We like our science,” he says. (The competition actually looks much closer to me than Kaldor lets on, since both programs appear poised to enter their first clinical trials soon.)

Ambrx also has other ideas for how best to apply its protein engineering techniques. It envisions developing antibody drugs that have the ability to hit cancer cells, while sparing healthy ones, and deliver a potent toxin to kill the tumors. Researchers have been dreaming about these so-called “magic bullets” for more than 30 years, although no pharmaceutical company has yet developed a commercially successful treatment. Genentech is aiming to be first with a souped-up version of its hit breast cancer drug, trastuzumab (Herceptin), and Seattle Genetics has released some stellar clinical trial results from earlier testing in Hodgkin’s disease.

The primary challenge with this technique over the years has been to get the toxin to stay attached to the antibody in the bloodstream until it gets into tumors, and then getting enzymes to chop it up and dump the toxin there. Seattle Genetics has spent more than a decade on solving this chemistry problem, and Ambrx clearly has been thinking about it too. If Seattle Genetics continues to do well, it’s safe to say more partners and investors will come knocking at Ambrx’s door. “We’re rooting for them,” Kaldor says.

One other big drug development theme that Ambrx has in the cupboard, and which gets about one-third of its resources, is for creating so-called antibody fragment drugs. These medicines, like ones in development by Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN) are supposed to be leaner and meaner than traditional large antibody molecules developed at Genentech and Biogen Idec. The advantage for the littler drug is that it should have the same ability to seek out tumor cells, without getting stuck trying to penetrate the bulky blood vessels that surround tumors.

The biggest challenge at a company like this, Kaldor says, is picking its shots wisely. If he focused on only one of the technology platforms, “it would be a travesty,” he says. It’s a better idea to keep pushing ahead on multiple fronts, he argues, to create as many valuable assets as possible. He has the cash in hand to weather the economic storm, and by the time the clouds lift, he wants to have something valuable to offer. “Pharmas are still relying on biotech capabilities, and in-licensing as their source of innovation,” Kaldor says.

If that proves to be the case, other big pharma companies will surely come calling on Ambrx’s headquarters on North Torrey Pines Road. Just tell them to turn left at Xconony’s San Diego office and give a shout.

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