Ikaria Developing Drug For “Hibernation-on-Demand,” Could Pull Off Biggest Biotech IPO Ever, VC Says

9/2/08Follow @xconomy

Hibernation-on-demand is one of those enduring concepts of science fiction. If you can slow down breathing, heartbeat, and other metabolic functions without going too far and suffocating people, you could possibly send them on long voyages into space. Here on Earth, it might buy time for a surgeon trying to save someone before he or she bleeds to death.

Nobody has ever gotten close to developing a drug to do this in people. Yet Ikaria Holdings, a privately held biotech company based in Clinton, NJ, with a research center in Seattle’s South Lake Union neighborhood, may be the first. The company has shown its liquid, injectable form of sodium sulfide can cause mice to go into a metabolic slowdown, without risks associated with cooling the body, and at low enough doses that it doesn’t cause toxic side effects. In May, a study of 36 healthy volunteers in Australia showed the drug, called IK-1001, was safe in people.

By the end of this year, Ikaria should be ready to start a larger study to show whether IK-1001 can work for patients with a certain disease, although Ikaria isn’t yet saying what that will be, says Csaba Szabo, Ikaria’s chief scientific officer and the head of the company’s Seattle research center.

“This company has substance,” says Szabo, a Hungarian whose name is pronounced Chah-buh Sah-bow. “I’ve never been in a company so efficient, so productive for a group this size.”

Ikaria has said previously that such a drug could buy extra time for doctors hurrying to treat patients with traumatic injuries, strokes, and heart attacks, and people undergoing heart bypass surgery or suffering surgical complications. The list is so long, the medical and business implications of making this work are huge.

I was amazed to learn that Ikaria is on the verge of entering a Phase II clinical trial with its hibernation-on-demand drug. Mark Roth, a scientist at the Fred Hutchinson Cancer Research Center, made waves in the journal Science in 2005 when he was the first to show hibernation-on-demand could be accomplished in mice. When Ikaria was founded shortly after, he predicted it would take the company five years to begin human clinical trials, in an interview with me when I was with The Seattle Times. The drug in its raw form—hydrogen sulfide gas—isn’t stable enough to be a drug, so Ikaria had to turn it into a liquid form and show regulators it had at least a year of shelf life.

In May, Roth said this in a statement: “The fact that IK-1001 progressed from the early concept stage to the completion of a Phase I trial in 18 months speaks volumes about the quality and innovative spirit of the R&D group at Ikaria.”

One of the company’s original venture backers predicts big things ahead: “Ikaria is the leading innovator in the critical care space, is profitable, and has a deep pipeline. It will probably be the biggest biotech IPO ever when it decides to go public,” said Robert Nelsen, managing director of Arch Venture Partners, in an e-mail.

Profitable and biotech don’t usually appear in the same sentence—but Ikaria has an interesting business strategy. The company went through a complicated merger in March 2007 between Ikaria, with its hibernation-on-demand technology, and New Jersey-based INO Therapeutics, which markets nitric oxide gas to help infants with “blue baby” syndrome breathe better. By hitching its wagon to INO, Ikaria got access to people with expertise in drug development, clinical trials, regulatory affairs, and a company with profits to invest. New Mountain Capital, a private equity firm, along with Arch, Venrock Associates, Altitude Life Science Ventures, Washington Research Foundation, and Alexandria Real Estate Equities, pumped $300 million of new equity capital into the company. The combined company generated revenues in 2007 of more than $200 million, chairman David Shaw said in January at the JP Morgan Healthcare Conference in San Francisco.

By merging with a profitable company, Ikaria’s Szabo said he doesn’t need more venture capital to support the research. He instead goes through a conventional budgeting process for resources within a profitable company. He oversees a group of about 25 people in Seattle, who do animal testing and work on new formulations of its drugs. “We do everything we need to move an idea to the clinical trial stage,” he says.

The research will likely grow in Seattle, although Szabo wouldn’t say by how much until the budgeting process is complete. But I could see with my own eyes that they are hiring right now. Szabo insisted that we carry on our interview during his lunch with a job applicant.

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