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Race to Mine Fungi for Drugs Revs up as Verdine’s LifeMine Gets $55M

Xconomy Boston — 

Can the life sciences industry finally begin to efficiently and systematically exploit the potential treasure trove of drugs hidden in fungi? It seems promising, thanks to cheaper DNA sequencing technologies, artificial intelligence, new academic research, and now the largest funding yet for a startup trying to take on the task.

This morning, LifeMine Therapeutics, a startup co-founded by Harvard University chemical biologist and serial biotech entrepreneur Greg Verdine and business colleague Weiqing Zhou, has landed a $55 million Series A round from a large group of investors including WuXi Healthcare Ventures, Google and Merck’s venture arm, and others. (As Xconomy reported in February, LifeMine is actually one of two startups led by Verdine as CEO as he eyes retirement from Harvard in a few years; the other is FogPharma.)

The funding is a significant bet that it might now finally be possible to hunt through the genomes of fungi to unearth new drugs.

“For all of the academics researching natural products we’ve kind of been hibernating,” says Neil Kelleher, a chemical biologist and the director of the Proteomics Center of Excellence at Northwestern University, who isn’t associated with LifeMine. “And the winter is starting to thaw.”

The startup aims to first develop cancer drugs, but is still years away from human trials. It has a long road ahead to prove that it can analyze a fungal genome and accurately predict which genes will yield potential drugs.

The pharmaceutical industry has its roots in so-called natural products, or drugs culled from living organisms, before chemistry-based approaches took hold. Many important drugs of the modern era, from antibiotics to immunosuppressants to anticancer drugs, are derived from natural chemicals made by organisms to defend themselves from harm. Fungi are a promising source of new drug candidates. Penicillin and the immunosuppressive drug cyclosporine are derived from fungi, and cholesterol-lowering statins were first discovered by a Japanese researcher who saw they were being secreted by fungi to kill other fungi.

But finding useful molecules within the slew of substances fungi make and understanding what they do has been, quite simply, “a pain in the ass,” Verdine says. This led the pharma industry to all but give up on harnessing the myriad weapons fungi and other microbes conceal.

“It took years and years to figure out what [these substances] did,” Verdine says. “And a lot of times people would rediscover a compound that was already known. Those are really big problems.”

Increasingly, however, it has become more feasible for academics, and now startups, to try to learn the secrets of fungi. The cost of DNA sequencing has plummeted, and along with it, the ability to store and manage vast amounts of genomic data has increased. Startups like Verdine’s Warp Drive Bio and Rockefeller University spinout Lodo Therapeutics, among others, have organized efforts in the past several years to comb through the genomes of bacteria for drugs at an industrial scale. Warp Drive got a large financial commitment from French drugmaking giant Sanofi, and Lodo has been backed by the Bill & Melinda Gates Foundation. Now momentum is starting to gather around a similar effort with fungi.

Just three months ago, Kelleher and colleagues including Nancy Keller at the University of Wisconsin, a leading fungal biologist; and a St. Louis company, Intact Genomics, published a paper that hit the cover of Nature Chemical Biology. They touted a “scalable” technology, named in shorthand FAC-MS, that can sift through important chunks of fungal DNA—what are known as gene clusters—to find molecules that might be useful for drugmaking. In their paper, Kelleher and Keller’s group said they discovered 17 natural products from 56 screened gene clusters.

“We found the needle in the haystack,” Kelleher says. “That’s a hit rate industry should be impressed by.”

The FAC-MS technology is being commercialized by Intact Genomics, Keller, and Kelleher, though Kelleher says “additional partnerships are likely to emerge.” The system adds to an emerging crop of companies attempting to find drugs from fungi. This group already includes LifeMine and a stealthy startup in Menlo Park, CA, called Hexagon Bio. An SEC filing shows Hexagon raised $8.3 million in private financing from nine investors in July. Its co-founders include UCLA chemist Yi Tang, an expert on fungal enzymes; founding 23andme scientist Brian Naughton; and two executives at the Stanford Technology Genome Center, Maureen Hillenmeyer and Colin Harvey. (Hexagon didn’t respond to a request for comment.)

Verdine says that Kelleher, Tang, and others have been “blazing a trail” in sequencing the genomes of fungi. “We’re pulling together a lot of insights that have been made by academics. That has helped set the stage for what we’re doing,” he says.

LifeMine, Verdine says, is attempting to become the first industrial-scale mover in the field. Verdine says the company has come up with an algorithm that makes it possible to quickly identify gene clusters in fungi and predict the type and function of the molecules they make. “That allows you to focus on a disease area, and on targets, and also to really focus single mindedly on tweaking the fungi so that they’ll open up and reveal those molecules,” he says.

Kelleher says the big question he has about LifeMine’s claims is how precise this algorithm is in making its predictions. And it’s important to note that, though LifeMine aims to first develop cancer drugs, it is up to four years away from human clinical testing. There is much work to be done to show that, as Verdine says, LifeMine’s genome-mining technology is the “missing piece of the puzzle” in deriving drugs from fungi.

Still, Kelleher calls LifeMine’s purported advances “totally exciting.” In theory, he says, LifeMine might be able to now unearth all of the derivatives of, say, the statin drug—lovastatin—that resulted from the discovery in Japan all those years ago. And from his perspective, the fact that insights like that might be possible means the pharma industry just might start looking into fungi once again.

“This is a renaissance,” he says.