Biotech, VC, cancer

Qwell Pharmaceuticals, Backed by Arch, Raises $7M for New Cancer, Inflammation Drugs

Luke Timmerman 1/6/09

Xconomy has learned that Qwell Pharmaceuticals, a Seattle-based drug developer in stealth mode, has raised $7 million in a Series A financing. The investment was led by Arch Venture Partners and the Wellcome Trust, the world’s second-biggest charitable foundation for biomedical research.

Qwell’s goal is to develop a new family of small-molecule drugs, derived from a plant source, that have a potent ability to fight tumors and excess inflammation of skin cells, says Steve Gillis, a managing director of Arch Venture Partners and the chairman of Qwell. The technology has its roots at the M.D. Anderson Cancer Center in Houston, in the lab of Jordan Gutterman. He’s a cancer researcher who has known Gillis for more than 20 years since he served as a scientific advisor to Seattle-based Immunex. Another longtime Gillis connection, Roger S. Anderson, has been hired to be chief technology officer.

Arch clearly sees this as another ‘”big idea” company, like other firms it has seeded to produce hibernation-on-demand (Ikaria) and develop adult stem cell therapies (Fate Therapeutics). Qwell’s first-round financing could total as much as $35 million in tranches if certain milestones are met, Gillis says. Qwell, which is housed in Arch’s downtown offices on Seattle’s Second Avenue, has already shown its compounds work in animal tests, and the company aims to bring its first drug candidate into clinical trials in 2009, Gillis says.

“This is a very exciting set of molecules,” Gillis says.

Gillis wouldn’t say what plant these compounds are derived from, but Gutterman’s lab appears to have been concentrating the past two years on a triterpene glycoside with unusual properties, derived from a desert legume from Australia. The compounds from these plants, or a mix of them, have been shown to kill a variety of blood cancers and solid tumor cells, with minimal side effects in the lab dish against healthy cells, according to Gutterman’s description of the work on his M.D. Anderson biographical web page.

The Qwell drugs are thought to work by blocking one of the hottest targets in cancer research today, the PI-3 kinase, according to Gutterman’s website. If that’s the mode of action for Qwell’s drugs (Gillis wouldn’t confirm that), then Qwell would be in competition …Next Page »

Luke Timmerman is the National Biotechnology Editor for Xconomy. You can e-mail him at ltimmerman@xconomy.com, call 206-624-2374, or follow him on Twitter at http://twitter.com/ldtimmerman.