San Diego’s Afraxis, which ceased to exist in January after the neuroscience startup licensed its entire library of drug compounds to Roche’s Genentech, has sprung back to life with proprietary technology that was not part of the $187.5 million deal.
Afraxis developed the technology to help assess the effectiveness of potential drug compounds in disorders of the central nervous system (CNS). Since the company was reconstituted, Afraxis has reached deals with various drug developers that are interested in using its system in their own CNS drug discovery efforts.
“We are only four months in existence, and we are going to be profitable this year,” said Afraxis CEO Carmine Stengone, who joined the startup in 2010 as vice president of business development. He negotiated much of the licensing deal with Genentech, which resulted in Afraxis being converted into a holding company set up to receive Genentech’s milestone payments.
As we’ve previously reported, Afraxis was founded in 2007 to advance research done by the Nobel laureate Susumu Tonegawa and others that identified a possible drug target for treating Fragile X syndrome, the second leading cause of mental retardation. The target they identified was PAK, an enzyme that affects the number, size, and shape of connections between neurons in the brain.
Stengone said that Roche’s Genentech was only interested in the therapeutic pipeline that Afraxis had developed. So, after the licensing deal was completed, Stengone became the CEO of a new company—also called Afraxis—that was spun out to commercialize the drug-assessment technology. San Diego’s Avalon Ventures, which bankrolled the first Afraxis, also is majority owner of the second Afraxis, Stengone said.
Most of the eight deals completed so far have been simple fee-for-service arrangements, Stengone said. But a partnership agreement announced last week with Sunovion Pharmaceuticals, the Marlborough, MA-based company previously known as Sepracor, is a bigger deal.
“What made the Sunovion deal different is that it is really collaborative,” Stengone said in a telephone call. “We have formed a joint governance committee to oversee everything, and we’re working on downstream [drug discovery] milestones.”
The new Afraxis technology significantly advances neuroscientists’ ability to rapidly analyze dendritic spines—the pinhead-like protrusions along the neuron’s cell body, Stengone said. The technology also has comes at a time when researchers have begun to correlate the size and density of dendritic spines with strong synaptic activity—which in turn is strongly associated with learning, memory, and cognition.
The new Afraxis system, named the Enhanced Spine Platform, can analyze about 250,000 dendritic spines per month. That is both fast and accurate enough to be used in drug discovery, Stengone said. The technique wasn’t practical before now, he explained, because it would take an academic lab using conventional technology six to nine months to analyze 3,000 to 5,000 dendritic spines. That was a method that took too long and did not generate enough data to ensure accuracy.
“What we’ve been able to do is change the paradigm for dendritic spine analysis and characterization,” Stengone said. In developing drugs for CNS disorders, scientists must often rely on behavioral measures to assess whether or not a prospective drug is effective.
He said the potential value of technology that relies on more objective measurements became apparent after a group of German scientists published a 2009 study of two promising drugs (known as gamma-secretase inhibitors) for treating Alzheimer’s disease.
At the time, Eli Lilly was developing the gamma-secretase inhibitor semagacestat to reduce the buildup of harmful amyloid plaques in Alzheimer’s patients. But the German group’s study revealed a potential adverse side effect—the drugs also dramatically reduced the density of dendritic spines in the neurons of mice.
Lilly terminated its semagacestat program nearly a year later—after preliminary findings from two late-stage clinical trials involving more than 2,600 patients showed that the drug appeared to accelerate patients’ cognitive decline as well as their ability to perform daily activities.
“It was very compelling data,” Stengone said. Taken together, the German study and the adverse results of Lilly’s semagacestat program indicated that a drug could cause abnormalities in dendritic spine size and density—and that, in turn, could result in negative cognitive effects.
Since then, Stengone said additional studies have suggested that dendritic spine abnormalities underlie many CNS disorders, including autism, schizophrenia, and Alzheimer’s.
At Afraxis, Stengone and others concluded that the company’s technology could become a valuable litmus test for Big Pharmas as they select specific compounds from a portfolio of CNS drug candidates as the ones that would be most likely to succeed in clinical trials.
“We think we offer value that wasn’t there before in terms of de-risked value,” Stengone said. “We’ll be growing the bottom line quite significantly going forward.”