State Tobacco Moneyman, John DesRosier, Aims to Push Biotech Ideas Beyond “Valley of Death”

12/18/08Follow @xconomy

A new batch of research grants, worth $19 million, was announced earlier this week by the state Life Sciences Discovery Fund. It’s the quasi-public agency charged with running a 10-year, $350 million program to invest the state’s tobacco settlement money in biomedical research and development. This round, grants were given to develop new vaccines, improve mental health in rural areas, enhance treatment of sudden cardiac arrest, and invent a new way to deliver biotech drugs in cells.

I interviewed John DesRosier, the fund’s director of programs, to try to better interpret what the fund is trying to do. DesRosier (pronounced Duh-ROE-zher) is the point man on staff, with more than 30 years of experience in research and technology commercialization. He’s a University of Washington microbiologist, with experience at a startup, BioControl Systems of Bothell, WA, that introduced four diagnostic tests for detecting dangerous bacteria in food.

Here are the highlights of the interview:

Xconomy: Why did the board pick these four grant proposals?

John DesRosier: My goal has always been to get in front of our board a suite of proposals that are all very, very high quality. The dollar value of that suite is always going to be more than we have available to spend. Then we tell the board they can’t make a mistake. Then we ask them to work on constructing a portfolio of investments they want to make around the state.

X: What about a little on each of these four grants, in terms of why they made the cut?

JD: I guess I’m speaking for the board. There’s always a variety of 11 voices in that room. So what you’ll get from me is a big overview. But with John Roll (of Washington State University), he’s identified a substantial amount of substance addiction and mental health issues are in rural areas, and aren’t being well addressed. I’m reminded that 23 of the 38 counties in the state are rural, and seven of those are subcategorized as “frontier” which means that you have less than one person per square mile. There are mental illness and substance addiction problems out there that are not being well-addressed. The typical protocols for dealing with substance abuse and mental illness have been developed for urban populations.

X: Isn’t it the same treatment, if, say, you have heroin addiction, you take methadone, right? What’s different?

JD: Delivery. It is the same pharmacologically. But a lot of this depends on primary care physicians, who are the only physicians the people in rural areas see. And they’re not trained to do mental health. Part of it is going to be bringing tools and knowledge, and adapting urban protocols to rural.

X: What about the other grants?

JD: You know about Seattle and King County EMS, and how special we are in responding to heart attacks? We’re talking about the group that has made Seattle arguably the top place in the nation for cardiac resuscitation. They are working closely with two external defibrillator makers, one is Medtronic Physio-Control, and the other is Philips. They feel there is still a lot to be done to improve.

X: With a goal of improving the survival rate?

JD: Yes, and to spread it around the state. I don’t know what the resuscitation rate is in other counties, but it’s probably not as good. We’re trying to translate protocols from an urban environment to a rural environment. These two proposals have a high public health component to them.

X: What about the vaccine initiative?

JD: This has a large public health component to it as well, to vaccinate people to prevent disease. It’s a consortium of seven institutions. All of them have some sort of specialty related to vaccine development. What we’re trying to do is build a pipeline among those seven institutions to move things from ideas all the way through early clinical trials. We’re talking about how to research it, produce it, how to scale it for clinical trials. The notion is that through this pipeline, institutions with complementary skills will be able to move it to a point where it can be licensed to companies.

X: What specific projects are in mind?

JD: The first project is to come up with a vaccine for E. Coli 0157:H7 (a potentially lethal diarrhea that people can get from food). The whole plan is to immunize cattle. You control it at the source.

X: How many other vaccine candidates are in this pipeline?

JD: Right now, they’ve picked three. This is an infrastructure they’re building. I hope dozens of candidates will go through it. The second one is for genital herpes. That’s probably a longer-term program. The third one is for syphilis. Apparently, syphilis is on the rise in the U.S, and they think they have a good handle on creating a vaccine.

X: What about Patrick Stayton‘s work at the UW?

JD: He’s a bioengineer, and he’s actually looking at intracellular delivery of biologic drugs. If you follow siRNA or antisense, these are promising new drug technologies. The big problem is that they aren’t effective until they get into the cell. There’s been a big problem with delivering these drugs into cells. Nobody’s cracked it yet. Pat Stayton is mimicking a natural system of how infectious organisms get into cells. What he’s done is bioengineered a delivery mechanism that will essentially allow these drugs to be taken up by cells as if they were a pathogenic organism. Then, once they are taken up, they will be released in the cell. They are particularly interested in doing this with RNA interference.

X: Why just accept four applicants? Why not more projects with smaller dollar amounts?

JD: These are not individual projects. We are launching major new initiatives. This isn’t just a research project. All of these are multi-faceted, and involve multiple institutions. Every single one of them has a variety of projects going on inside them. We expect a certain fraction of this work will still be going on 10 years from now. We expect these will bring in many times more than our original investment in other dollars in the future. We expect these to spin off licensable technologies to companies.

X: What lessons do you think researchers should take from this round of grants to help sharpen up their proposals?

JD: Three of four winners here are re-submissions. So they were submitted in the first round, and didn’t make it. They got reviewers’ comments back, took those to heart, re-submitted, and were successful. I think the message is we are looking for things with statewide impact. We are looking for things that are multi-institutional, getting people to collaborate across the state.

X: Earlier this week, Massachusetts came out with its state grants too. I saw they signed up a partnership with Johnson & Johnson. It’s not for a lot of money, but they get a seat on the board. Is that something you’d consider to help foster more commercial transfer?

JD: Actually, Johnson & Johnson responded to one of our press releases. We’ve talked to them. I think it would be of interest. One of the things for economic development is that we want to see things happen here in Washington state. However, I’m realistic enough to know that when you want to commercialize things you need to think a bit beyond that. We’re really committed to seeing new companies formed in Washington state. But we sent yesterday results from the grants to our contact at J&J to see if they are interested in following up.

X: You mentioned before the idea that you want a balanced portfolio of investments. There are other people who say you ought to focus on one thing. Has there been any revisiting of that idea, focus your bets, so to speak, on stem cells or something like that?

JD: We’re still pretty early in our existence. At this point, we are still trying to ferret out the very best ideas in the state to see what the diversity looks like. We want to know where we stand, where the key strengths are.

X: As a technology commercialization guy with a long history, how much of a role would you say politics plays here? In the selections, the strategy. Is this the absolute best way to go about developing new drugs and devices for society from a purely commercial view?

JD: It is problematic that we can’t invest directly in companies. If you want to be where the rubber really meets the road, you invest in companies. There’s an argument to be made, and a lot of states have made it, that you ought to be focused on that. But we’ve talked with you before, and we have a Constitutional prohibition against that in this state. So we encourage corporate collaborators. Eight of the first 17 investments we made have corporate collaborators, or involvement one way or another. So we’re at about 50 percent. So if the notion is that you can only make an impact by funding companies, people may argue with what we’re doing.

We’ve really been largely playing in that so-called “Valley of Death.” Given our restrictions with respect to the Constitution, we’re really trying to help push things through that valley, and take promising ideas, and really ask the question of whether these have commercial merit.

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