Agios Germanos, Greece. Source: http://bit.ly/YRDIBJ
I was quoted in an article in the November 19, 2012 issue of Chemical & Engineering News (C&EN) by senior editor Lisa M Jarvis. The article is entitled
The article focuses on Agios Pharmaceuticals’ (Cambridge, MA) strategy for building a company that can endure as an independent firm over a long period of time, and that can also demonstrate sustained performance.
This contrasts with the recent trend toward “virtual biotech companies”–lean companies with only a very few employees that outsource most of their functions, and that are designed for early acquisition by a Big Pharma or large biotech company. The virtual company strategy is designed to deal with the inability of most young biotech companies to go public in the current financial environment. Without the ability to go public, young companies cannot provide early-stage venture capital investors with a profitable exit within a few years after launching the company. Virtual companies typically have a few assets, such as molecules that are ready for preclinical studies or early clinical trials. The goal is to obtain enough evidence that their compounds can become drugs to interest a Big Pharma.
In contrast, there are a few young “platform companies” that are built on a broad technology platform, which aim to address important areas of biology and potentially to develop numerous products with the potential to address important areas of unmet medical need. One of these is Agios.
“Built to Last” in the current biotech ecosystem
In the C&EN article, I was quoted as saying that only a few platform companies have been launched in recent years. In the Boston area, in addition to Agios, such companies include Forma Therapeutics and Aileron Therapeutics. I was further quoted as saying “These companies are built to last.”
That brings up the old business paradigm from the 1990s and early 2000s–“Built to Last” versus “Built to Flip”. Those involved in building virtual biotech companies–especially venture capitalists and angel investors–do not like the use of “Built to Flip” to characterize their companies. And there are some fine virtual biotechs–some, such as Energesis and Zafgen–which we have covered in our blog.
(Plexxikon, the developer of targeted melanoma drug vemurafenib, also operated as a virtual company. However, it had a technology platform, and had the potential to become an independent biotech with marketed products. Thus Plexxikon did not fit the usual “virtual biotech model”. Nevertheless, it was acquired by Daiichi Sankyo in 2011.)
However, some industry commentators believe that “Built to Flip” is an appropriate designation for virtual biotech companies, and that the virtual model is likely to be detrimental to drug discovery and to the biotech/pharma industry as a whole.
Meanwhile, the 2012 BIO International Convention in Boston had a session entitled “Moving the Goal Posts: How to Build a Free-Standing Biotech from Scratch in Today’s Environment.” This session focused on how to build the “next Vertex or even the next Genentech” (i.e., a “Built to Last” biotech company) in today’s environment. John Evans, the Vice President of Business Development & Operations of Agios was a speaker at that session. The session was moderated by Bruce Booth of Atlas Ventures. Thus, despite the preference for lean virtual biotech companies in the current funding environment, there is an interest in the entrepreneurial and venture capital communities for how free-standing biotechs might emerge under current conditions.
How to build a young platform biotech company
The Biopharmconsortium Blog has included three articles about Agios:
- Cancer metabolism as a target for drug discovery: Agios Pharmaceuticals (December 31, 2009)
- Agios Pharmaceuticals partners with Celgene (April 23, 2010)
- Cancer metabolism specialist Agios Pharmaceuticals continues its spectacular fundraising success (November 30, 2011)
These articles, as well as the November 19 2012 C&EN article, outline how Agios has been building a free-standing biotech in today’s unfavorable environment. Agios’ strategy is based on three elements:
- A stellar group of scientific founders–Drs. Craig B. Thompson, Tak W. Mak, and Lewis C. Cantley.
- A strong proprietary technology platform based on cancer metabolism
- A financing strategy that includes both venture capital and partnerships with established companies. In the case of Agios, their partner is Celgene. The Agios/Celgene partnership provides Agios with $150 million, and allows Agios to maintain control over the direction of its early stage research.
As stated in the C&EN article, the financial security gained via Agios’ funding by its venture investors and by Celgene enables Agios to work on multiple potential targets, with the goal of dominating the field of cancer metabolism. Agios focuses on two types of targets: metabolic enzyme species that are found only in cancer cells, and enzyme species on which a cancer cell has become dependent. Agios researchers intend to develop drugs against targets for which their are predictive biomarkers that identify the right patients for clinical studies.
New developments outlined in the November 19, 2012 C&EN article
Both the November 19, 2012 C&EN article and our Bipharmconsortium Blog articles outline Agios’ program to target a mutated form of isocitrate dehydrogenase 1 (IDH1), which together with mutated IDH2 has been implicated in 70% of human brain cancers. As stated in the C&EN article, Agios researchers have recently reported a series of compounds that selectively inhibit the mutant form of IDH1. This research had been carried out in collaboration with researchers from Ember Therapeutics (Watertown, MA). As we stated in another Biopharmconsortium Blog article, Ember specializes in targeting beige adipocytes for treatment of metabolic diseases.
As we noted in our November 30, 2011 Biopharmconsortium Blog article, Agios had slated a portion of the $78 million that it raised in its Series C financing to expand its R&D efforts into inborn errors of metabolism (IEMs). IEMs comprise a large class of inherited disorders of metabolism, most of which are defects in single genes that code for metabolic enzymes. These rare metabolic diseases have a high level of unmet medical need.
As outlined in the C&EN article, Agios’ work with mutant IDH1 and IDH2 is serving as a bridge to the company’s programs in IEMs. IDH2 mutations have been found in a class of children with 2-hydroxyglutaric aciduria, a rare inherited neurometabolic disorder that can cause developmental delay, epilepsy, and a set of other pathologies.
According to the C&EN article, IEMs are of special strategic interest to Agios. Agios CEO David Schenkein stated that expanding the company’s R&D efforts into IEMs helps the company to manage the risk profile of its portfolio. In the case of cancer, Agios researchers must identify and validate targets involved in the pathobiology of these diseases, and then to find drugs that modulate these targets. In the case of IEMs, disease biology is already validated by genetics.
Moreover, IEMs have small patient populations. Thus only small clinical trials are needed to bring a drug to market. Agios therefore believes that it can bring drugs for these diseases to market on its own, without the need for a larger partner such as Celgene or a Big Pharma.
As we discussed in a Biopharmconsortium Blog article on improving the clinical trial system, although rare diseases only require small clinical trials, finding and recruiting patients for the trials is made more difficult because of the very small number of patients with a particular disease. One solution is to work with patient advocates and “disease organizations”, some of which have patient registries. In the case of 2-hydroxyglutaric aciduria and other organic acidemias, a “disease organization” exists–the Organic Acidemia Association (OAA). Perhaps Agios will find it fruitful to work with the OAA in its patient recruitment efforts.
Currently, Agios is focused on getting compounds into the clinic–both for IEMs and for cancer. Looking down the road, the company’s $180 million war chest should enable Agios to put several compounds through proof-of-concept studies, according to Dr. Schenkein. (This is besides any cancer drug candidates that are licensed by Celgene.) Despite Agios’ strategy of conducting small trials for IEM drug candidates, Dr. Schenkein said that the company will eventually need to go public to achieve its strategic goal of dominating the cancer metabolism field.
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