Doug Williams left one of biotechnology’s biggest R&D jobs, at Biogen, in July. Now we know why.
Williams is now the founding CEO of Codiak Biosciences, a Cambridge, Mass.-based startup. The little company is announcing today it has raised $80 million in committed venture capital spread over two installments. Two venture firms known for creating ambitious biotech companies, ARCH Venture Partners and Flagship Ventures, pieced it together to build on exosome biology from the lab of Raghu Kalluri at MD Anderson Cancer Center in Houston, Tex. Fidelity Management and Research, the Alaska Permanent Fund and Alexandria Venture Investments joined the financing.
This company aspires to be the first mover in using exosome biology to develop drugs. Exosomes are tiny vesicles secreted by all cells, and present in the blood and other bodily fluids. Since being discovered in the early 1980s, many scientists believed their role was just to dispose of cellular trash, such as chewed up pieces of DNA and RNA. More recently, scientists have learned that certain cancer-cell derived exosomes carry specific proteins on the surface that act like big red flags that are distinct to the cancer, and can be detected with standard lab tools. Not only that, exosomes can carry drug payloads, in the form of messenger RNA molecules, microRNAs, antibody fragments, or even whole antibodies to a specific site, Williams said. These small vesicles can get inside cells a couple different ways, and dump their payloads in the cell's cytoplasm.
Taken together, it raises the possibility of targeted drug delivery to certain cells, or tissues. Diagnostics are another potential application. That was enough to excite ARCH and Flagship with possibilities, and to get Williams to leave a high-powered job to start something.
“Biogen is a great company with great prospects, but I really do like being in a small company environment,” Williams said. “As CEO, you can be focused on science, moving the science ahead, and building a team.”A
Michael Gladstone, a principal at Atlas Venture, a firm that isn’t invested in Codiak, said exosome biology could go in many different directions. “There are probably a number of interesting ways to use exosomes as a delivery vehicle for all kinds of RNA-based therapeutics, and likely to deliver other protein/DNA cargo as well. This type of delivery approach could have value in a number of places outside oncology,” he said. A couple competitors have emerged in the diagnostics arena--Irving, Tex.-based Caris Life Sciences and Cambridge, Mass.-based Exosome Diagnostics--but no serious therapeutics companies have emerged yet based on exosome biology, said Dima Ter-Ovanesyan, a Harvard University graduate student studying exosomes.
As is often the case in the small world of biotech venture capital, relationships matter. (Timmerman Report subscribers can see “Interlocking Relationships Make VC and Pharma Go Round, Not Just Science”).
The Codiak story begins with a 25-year-long professional relationship. Steve Gillis, a managing director at Arch Venture Partners, became interested in new targeting capabilities with exosomes after a conversation with Ronald DePinho, the president of MD Anderson. While digging around into Kalluri’s work, he learned that Flagship Ventures had a proto-company of its own that had obtained some intellectual property from other sources. ARCH and Flagship, which have a long history of working together, pooled their intellectual property. And Gillis, who recruited Williams to join Seattle-based Immunex more than 25 years ago, called on his old friend and recruited him to spearhead the startup.
The initial focus of Codiak will be pancreatic cancer. It’s a notoriously tough-to-treat cancer, and it’s often diagnosed late in the game. People usually only have a few months to live after diagnosis. The company will seek to build on research Kalluri’s team published in Nature in June. At that time, Kalluri said his team had identified a proteoglycan (a protein covered with lots of carbohydrate molecules) called Glypican-1, which was present on the surface of exosomes.
When Glypican-1 was present in the blood, it could distinguish absolutely between healthy tissues, and those with early and late-stage pancreatic cancer. “Those were pretty remarkable results,” Williams said. “We’re in the process of optimizing the assay format.” The company will also seek to find out if Glypican-1 might present a useful target for other malignancies, Williams said.
Gillis said Kalluri’s group has generated more data from animal tests, which hasn’t yet been published. “It’s about being able to target various oncogene targets that have previously failed to be targetable via small molecules,” Gillis said. Kalluri, he said, “has gotten some dramatic data in animal models. If we can rapidly exploit that clinically, it would be a big win.”
For now, Codiak is still in the earliest of early days. It has just four employees, and has extended a few more job offers, Williams said. He has found some scarce lab space in Cambridge, Mass. to get going in earnest in a few weeks. Raising a full $80 million upfront will be enough to get operations properly set up, and allow Williams to focus on guiding the science, rather than constantly raising money, he said. “I wouldn’t have made the jump if I didn’t think we were going to have sufficient funding to get to an inflection point on diagnostic and therapeutic applications,” Williams said.
The diagnostic potential is pretty clear. If exosomes are in all bodily fluids, and you know which one to look for, you should be able to detect cancer-associated exosomes in a trace quantity of blood, not just a piece of biopsied tumor tissue that’s obvious after the disease has worsened.
Cancer isn’t the only potential application for this biology, Williams said. Researchers have been focusing on exosomes in the blood that contain specific forms of the tau protein. That could be useful for Alzheimer’s treatment, because those tau proteins in the blood can be detected years before a patient’s cognition begins to decline, Williams said.
After just a few months on the job, Williams said he can relate to the experience of many entrepreneurs who are thrilled, and terrified, at the same time. There are things he’s had to learn quickly, that are outside his comfort zone, that you can’t just delegate to someone else at a big company.
“This is the first time in my career I’ve ever been employee 1. It’s a great experience,” Williams said. “I’m learning all sorts of new things.”
