Arzeda, a University of Washington Spinout, Sees Future in Directed Evolution

9/12/08Follow @xconomy

Arzeda sees a future in which it will custom design enzymes, on a computer, to do things in the body that biologists now can only dream about. The technology, emerging from David Baker‘s lab at the University of Washington, has generated enough interest from biotechnology industry partners that three of his young apprentices have decided to take the leap to found a new company.

Right now, Arzeda is in its founding days. It is finalizing its technology license from the UW, looking for lab space in downtown Seattle, and is getting close to nailing down its initial round of venture capital, says co-founder Eric Althoff, 32, a postdoc in Baker’s lab the past four years. The founding team is composed of a pair of UW protein science postdocs who have worked together in the lab—Althoff and Daniela Grabs—and computer science graduate student Alexandre Zanghellini.

This is a company with a big idea. Enzymes are the complex proteins that do an enormous amount of essential work in the body, from chopping up and digesting your lunch, to forming raw building materials for all sorts of tissues. Big companies like Denmark-based Novozymes and Genencor, a division of the Danish company Danisco, make a lot of money selling engineered enzymes that are modified versions of the natural things, and which can be used for everything from waste water cleanup to detergent additives. Cambridge, MA-based Genzyme (NASDAQ: GENZ) has become one of the biotech industry’s leading companies on making enzyme replacement therapies like Cerezyme and Myozyme, for people with rare genetic disorders that can’t make enough of certain enzymes needed to stay healthy.

What those big industry players do is take a natural enzyme and modify it slightly to perform a desired task, Althoff says. Arzeda is different, because it has amassed a huge computer library over the past four years that it can use to custom-design brand new enzymes from scratch, with enhanced properties. In theory, you could make a type of enzyme replacement drug that is more potent or lasts longer than one of the Genzyme drugs, Althoff says. The technique has a very cool-sounding name in scientific circles, “directed evolution.”

“One of the reasons we’re going for it is that during conferences a huge number of companies approached us and wanted to collaborate with us to work on their problems,” Althoff says.

So what’s special here? I asked. “We are really not limited to just what natural enzymes can do,” Althoff says. “We are the first to show we can put this into practice.”

It has certainly grabbed attention in scientific circles. Althoff says the company has developed more than 60 different enzymes using its technique, and the work has generated publications in Science and Nature.

Still, like any biotech startup, Arzeda has its work cut out. The scientists have done experiments with their enzymes in lab dishes, but they still have to show that Arzeda’s computer-designed enzymes behave like natural enzymes in animals before they can think seriously about putting them in people as drugs. Arzeda could try to apply this technology to any number of diseases or applications, and it hasn’t yet fully formed its strategy. The company is looking for a CEO who can hone that plan and maintain focus on a few applications, Althoff says. “We are thinking about therapeutic and industrial enzymes,” he says.

As with any startup, I had to ask what the name means. It turns out to be an amalgam of the founders initials, which has the added bonus of being free and available for the taking. “It took us a long time to come up with, and I think it sounds good,” Althoff says. Based on the rest of what he says, we’ll soon see if the venture capital community agrees.

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