A survivor of the systems biology trend, Entelos wants more.
By John Russell
March 8, 2005 | Just as the systems biology label is falling out of vogue, a few companies in that space are showing signs of sustainable life by winning repeat pharma business and that holiest of grails — the promise of a piece of the action for compounds they help develop.
Last month, model-maker Entelos announced that its "research" collaboration with Organon Pharmaceuticals had been extended to include co-promotion and commercialization rights for rheumatoid arthritis (RA) therapeutics. That's a significant change, as noted by Organon senior vice president of research David Nicholson: "This transition from a strictly research effort was the next step in our growing relationship."
Near the end of 2004, another systems biology company, Ingenuity Systems, deepened its deal with Merck. Ingenuity subscribers generally access its Pathways Knowledge Base and Pathway Analysis tool over the Web. Merck thought enough of the technology to bring the entire system inside its firewall and deploy it companywide.
Meanwhile, startup Genstruct used its in silico platform to identify mechanism-of-action hypotheses on promising compounds that had stumped Pfizer. "Obviously, there was enough material in there that we've extended our collaboration," says Enoch Huang, director of molecular informatics at Pfizer Research Technology Center.
For good or ill, Entelos, Ingenuity, and Genstruct — and others — happily sailed under the systems biology banner. There was definitely market buzz around the label. However, there was also confusion, and Entelos president and CEO James Karis complains that pharma still has a difficult time differentiating among the players.
Whatever they are called, companies developing computational predictive biology platforms have begun delivering enough value — biomarkers, prioritized targets, novel pathways — to prompt pharmaceutical companies to cough up cash and commitment. That's emboldening the systems biology crowd to want more.
"The mega trend is pretty good," Karis says. The challenge these companies face is growth. Many of them want to be drug companies when they grow up — even if most won't say so. Entelos is a good example of how the survivors have held on, and it is a little more daring in outlining its aspirations.
Founded in 1996, Entelos was an early systems biology pioneer. Since then, its staff has grown to 70. The company's bread-and-butter technology is its line of PhysioLabs: custom mathematical models, first designed around specific diseases, such as RA, and now being extended to general physiology systems such as inflammation.
Initial efforts were focused on discovery, which helped build scientific credibility. Collaborators have included Pfizer, Bristol-Myers Squibb, the American Diabetes Association, and others. Recently, Entelos has shifted focus to pre-clinical and clinical opportunities because that's where the money is. Pharma has plenty of targets.
The way in which Entelos derived income has also evolved. The Organon collaboration has included royalties, milestones for the targets, access to abandon compounds, and technology transfer for screening assays before ascending to the co-development and commercialization plateau.
Now, Karis says, "We've started to use our technology to look at in-licensing opportunities, and we have been evaluating — we haven't done one yet — opportunities. That's the evolution of the business model: revenues and services fees as well as product participation."
Adds Entelos chief business officer Michael French, "We may very well come out and say, 'This disease area we're going to own.' It might a disease where pharma may or may not be interested, but where we believe our technology puts us in a stronger position."
One competitor dismisses in-licensing as too expensive. Another is intrigued by the idea. They'd all like to link payment to direct participation in the IP their predictive platforms produce. A few are succeeding to some extent.
This is an interesting period for systems biology's wing of predictive biology companies. The label's luster is fading, but buoyed by pharma's growing interest, they are trying to figure out how to grow.
Will Entelos play Daedalus or Icarus? What's your prediction? Write me at email@example.com.