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Making Virtual Drug Development a Reality

Stromedix is built with minimal infrastructure.

March 16, 2010 | In the fall of 2005, Michael Gilman left his position as executive VP research at Biogen Idec after more than six years. “I had no particular idea of what I wanted to do, I just wanted to do something different,” he said.

He met with executives at Atlas Venture and began brainstorming. The discussion gravitated towards fibrosis, a serious, common condition with no adequate treatment. “That was literally as deep as the analysis went at that point,” recalled Gilman, who was given an office and told to figure it out. “It was exactly what I needed. After all those years at Biogen Idec, just being left alone to think? Oh my God, it was the most wonderful thing!”

Gilman worked on the company from January 2006 until it fledged in March 2007. He raised his first financing round in May and Stromedix, as the company is called, began hiring that June. The company is turning the traditional drug development model on its head. Not only did it raise money first before identifying its lead molecule, but Gilman is running a completely virtual organization, with no wet labs. “We’re worshiping at the altar of virtual,” he said.

Clinical Problem

Gilman calls fibrosis “a major clinical problem that no-one knows about.” It is essentially wound repair gone bad—an accumulation of scar tissue leading to organ failure. “It is the final pathway in solid organ failure—chronic kidney disease, liver disease, congestive heart failure, pulmonary fibrosis. A big problem, but no approved drugs and very few in development,” says Gilman.

On the other hand, the biology of fibrosis was pretty well understood. “The issue wasn’t [that] we don’t know what to do, we just don’t know how to prove it in the clinic.” The paradox was that in the absence of any approved drugs, there were by definition no trial designs or animal models. “People were afraid of it,” says Gilman.

For the first few months at Atlas, Gilman did a thought experiment. Suppose someone handed you a drug, what would you do with it? How would you prove it? He came up with kidney transplant patients, 80-90% of whom will ultimately develop fibrosis. “You want to find a clinical setting in which fibrosis develops in 2-3 years rather than 20-30 years, and patients where you can get tissue. That’s what led us to organ transplant.”

Next, it was time to go shopping. Gilman had a list of targets and pathways he considered important and molecules he knew were under development. His pitch to his potential partners was: We’ll take on cost and risk, and if it becomes a monster, we’re all happy. “These business negotiations are like clinical trials; they have an attrition rate associated with them. You got to start five to finish one.”

After discussing terms with a couple of interested parties, Gilman ended up, not unsurprisingly, at Biogen Idec, where a program he knew well had been shelved, presumably for strategic reasons after a routine portfolio review. “It was a win-win—Biogen was walking away from it.” By putting the drug in the hands of a small, motivated management team, there was a new economic upside for the drug developers, and a medical upside for the patients.

The key pathway for fibrosis involves the cytokine TGFβ. Biogen Idec had developed an antibody to integrin αVβ6, which couples the tissue injury to the fibrotic response. Block the integrin, and the response is uncoupled. Biogen Idec had some beautiful animal models, but had gone no further.

Gilman says he was fortunate to get the rights to the drug, renamed STX-100. “It helped I knew the molecule. You had to know it was there; you had to know it was dead; it was worth having; and then you needed to know what buttons to push to get it out! Fortunately I still had lots of friends there.”

While generally agnostic on the issue of biologic or a small molecule, Gilman admits to a slight bias. “We’re trying to test a biological hypothesis—targeting this molecule will prevent this molecular cascade. If you want to test a biological hypothesis, you want to minimize the molecule-specific risk. That’s generally true of biologics. They are much more specific than small molecules.” On the flip side, they are much more expensive to manufacture.

After completing the license in May 2007, the Stromedix team filed a new development plan with the FDA. Gilman says the Phase I trial, which concluded last year, “looked great.” For Phase II, Gilman has decided to do two trials—the original transplant plan as well as idiopathic pulmonary fibrosis (IPF), or what Gilman calls “the killer app for this drug.”

One of his collaborators has “a priceless collection of biopsies,” all run on Affymetrix arrays, generating masses of transcriptional data. “This allowed us to verify that β6 and the TGFβ pathway are indeed activated in patients with failing grafts,” says Gilman, as well as identify a gene signature that will be followed in the clinical trial. “We know the inter-patient variability to predict treatment effects,” he says, which allows Stromedix to “power up the study” and persuade investors to do two simultaneous trials. “The incremental cost to do second trial is very low.” The clinical trials are being managed by a Cincinnati CRO specializing in transplant trials—CTI Clinical Trial.

Virtual Presence

Stromedix is not alone in pursuing a virtual model. Another Atlas-funded start-up, Zafgen, is developing an obesity drug with just a handful of staff. It’s not that Gilman has anything against wet labs. “I love wet labs,” he says, “but they’re expensive to build, expensive to staff.”

In addition to Gilman, Stromedix has a chief medical officer, Brad Maroni; a head of research who ran the program at Biogen, Shelia Violette; clinical operations; program management and regulatory affairs; business development (IP, contracting); and an office manager and admin. Gilman has no doubt he can build a therapeutic biotech company with minimal internal infrastructure. “It’s probably the best way to do it, because the workload when you’re developing a drug is very ‘lumpy.’ There are times when you need 15 FTEs, and times when you need four. The ability to expand and contract while paying people by the hour is very attractive.”

Of greater concern is running a single-product company. “On one hand, that creates a tremendous amount of focus—we’ll live or die on the ability to move this drug forward. That gets your attention. But we’re not especially diversified, which is problematic—companies relying for survival on a single drug can hang onto that drug too long. I’m very conscious about not letting bad decisions creep in because of that.”

The market for IPF is about $1 billion annually, and the transplantation market is another $1 billion opportunity. Gilman says he has the bandwidth to consider other programs, but probably not the cash, not that he needs to raise any more money in 2010. In the past two years, Gilman has learned a lot about fibrosis and how to develop drugs, and has built a network of investigators that could help establish additional programs when the time and opportunity is right.

This article also appeared in the March-April 2010 issue of Bio-IT World Magazine.
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