Novo Nordisk’s CEO once said his company put down roots in Seattle because of a historic blunder. But now the Denmark-based drugmaker, the world’s largest maker of insulin for diabetes, is moving ahead with purpose on a long-term plan to weave itself into the Seattle biotech community, and hopefully come up with some useful new drugs.
Novo made its initial move into Seattle two decades ago when it formed a partnership with ZymoGenetics, following a missed opportunity to partner with South San Francisco-based Genentech, the early leader in developing genetically engineered insulin. After seeing the Northwest’s immunology talent at close range, Novo decided to build its own 80-person immunology/inflammatory disease research outpost in 2008. This year, Novo has doubled down on that investment, adding another 20 people here to run early-stage R&D of new therapies for one form of immunologic disease—type 1 diabetes.
The jobs won’t make a dent in the local unemployment rate, but Novo’s local move is noteworthy for a number of reasons. The Seattle operation is seeking to form collaborations with academic and biotech partners to direct its money and manpower toward early-stage R&D projects that are a little too far along in development to attract federal grants, yet not far enough along in development for venture capital. Novo, which spends $1.7 billion a year on diabetes R&D, has already signaled its intent to move into this space through a partnership with the New York-based Juvenile Diabetes Research Foundation (JDRF) in which the company will seek to pick up the baton on some of the more interesting projects the foundation finances at academic groups and biotech companies. And Novo has found an important local partner, the Benaroya Research Institute at Virginia Mason, which will help the company do long-term studies to see how the immune systems of patients with autoimmune disorders change over time. The BRI has one of the world’s biggest biobank repositories of tissue samples, and medical histories, from patients with autoimmune diseases.
While this is pretty early-stage science for a drug company, Novo saw its profits climb 18 percent last year as the diabetes epidemic raged on, allowing it to invest in the kind of projects that might take 10 years to pan out, if ever. The payoff to Novo could be considerable. Autoimmunity, the root cause of a lot of chronic diseases like rheumatoid arthritis, multiple sclerosis, and lupus, affects a staggering number of people, about 14 million to 24 million in the U.S. alone, according to the National Institutes of Health.
Matthias von Herrath, a Type 1 diabetes researcher that Novo recruited from an academic post at the La Jolla Institute for Allergy and Immunology, says he sees this as a rare opportunity emerging at Novo to run a translational R&D team. Essentially, he will get to bring the resources of a big drugmaker to bear on early-stage Type 1 diabetes programs that have been too costly for small biotech companies to handle, too far out of academia’s intellectual comfort zone, and too small to compete for time and attention against late-stage projects in budget battles inside big drug companies.
“What drew me to industry is the realization that things you discover in academia, and you have blue-eyed hope that you’ll write a great paper and then somebody else will come along and think it’s a great paper, and then two years later you’ll have a great drug, well, that doesn’t work so well,” von Herrath says with a laugh. “I came to realize this translational work is not so easy. And what makes it worse is that things get lost in translation. Fundamentally lost in translation, because of issues of resources, competition, proprietariness.”
Doug Ringler, the former CEO of Cambridge, MA-based ToleRx, a type 1 diabetes drug developer, says he’s impressed with the collaboration between Novo and the JDRF. It’s the kind of partnership that could help answer important questions that biologists want to know, like whether inhibiting cells with a marker called CD-3 might be an effective way to fight type 1 diabetes. “With the failure of multiple immunotherapy efforts, including most recently anti-CD3, there was a need to redouble our efforts in the investigation of the immunopathogenesis of type 1 diabetes, including examining new and novel mechanisms that are unproven. The new initiative between Novo Nordisk and JDRF, led by Matthias von Herrath, is a superb mechanism to do that, combining excellent leadership with expansive infrastructural support,” Ringler said in an e-mail.
If the Seattle teams at Novo, and its local collaborators, are able to show encouraging results of drugs in late-stage animal and early-stage human trials, then Novo plans to hand off these projects to bigger internal development teams at Novo offices in Denmark, and Princeton, NJ, says Jacob Sten Petersen, Novo’s corporate and scientific vice president.
Type 1 diabetes, a condition in which the immune system attacks pancreatic beta cells, makes people unable to produce enough insulin to control their blood sugar. Diagnosed in about 30,000 people each year in the U.S., this is a different condition than the more common form of diabetes, type 2, in which people—typically once they become overweight—gradually lose the ability to use insulin properly.
Besides von Herrath’s group, Novo’s other autoimmune research groups led by Don Foster are focused on conditions like rheumatoid arthritis, Crohn’s disease, and lupus. Having those colleagues in the same building means von Herrath’s group will get to share all kinds of scientific instruments, and brainstorm about immune system problems that may have some common denominators.
Von Herrath says he envisions the Novo team working on a variety of projects, and pushing them through all kinds of rigorous tests to get them ready for late-stage development. The work will focus on things like finding biomarkers to help determine when a treatment is inducing the desired immune response that predict success in clinical trials. Traditionally, companies haven’t had a good idea how to translate dosing from mice into humans, so Novo plans to do methodical work on getting the chemical formulations, delivery mode, dosing, dose schedules, and biomarker work all in alignment to give a drug its best shot in late-stage development, where the big money gets wagered.
Novo isn’t being too specific yet about what kind of projects it has on the front burner, but von Herrath did say he’s generally excited about therapies that can tamp down an excessive immune response in a local region, like that of the pancreas. The local-acting nature of the drug is critical, he says, because a drug that circulates throughout the bloodstream and tamps down the immune system could have the negative side effect of making people vulnerable to opportunistic infections. For Type 1 diabetes, a chronic disease often diagnosed in children, the safety profile of any new treatment has to squeaky-clean.
Novo has plenty of relationships in the biotech community, and von Herrath got to know quite a few people in industry through about 10 years of consulting while he was in academia. He says he learned a lot about not just the limits of what academia can do for drug development, but also the limits of what venture-backed biotech companies can do. He talked about how many companies with promising concepts for Type 1 diabetes, like ToleRx and Palo Alto, CA-based Bayhill Therapeutics, which hit the wall after struggling to deliver the kind of timely returns their investors wanted.
With oral insulins—an attractive concept that could reduce the need for regular injections—nobody in the pharma industry was able to figure out how to get the right dose into people after some promising animal experiments. The short-term investor mindset forced those programs to move ahead too far too fast, when a methodical approach might have been the best way to go, von Herrath says.
“Oral insulin works well in many animal models for tolerance, and it’s been known since the early 1990s,” von Herrath says. “The way it was translated, nobody knew what dose to use in humans. That’s a common issue. But instead of working the kinks out, and coming up with a rational plan, the first trial was a Hail Mary pass. People thought ‘we better do something rather than nothing.’ That’s a human impulse, I understand. They took a dose for humans that seemed like it wouldn’t do any harm, which is important in type 1. But that’s not necessarily the best dose to get efficacy.”
The need to do those “Hail Mary passes” might sound familiar to anyone working at a venture-backed biotech company that is expected to work wonders on a shoestring budget. Although Novo doesn’t have to worry about running out of money, it’s a Big Pharma company like many others with far-flung research operations, lots of different priorities, and a limited number of R&D successes to brag about. But von Herrath clearly exudes enthusiasm about his opportunity to take drug R&D programs further than he ever could in academia or as a consultant for cash-strapped biotech companies. “It’s something I’ve dreamed about for a long-time,” he says.