A Nobel Laureate’s Stealthy Biotech, Its Japanese Pharma Backer, and the Englishman In Charge

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Linda Buck of the Fred Hutchinson Cancer Research Center. At Kirkland, WA-based Rosetta Inpharmatics where he worked from 1999 until the company was bought by Merck in 2001, the founding team included Nobel laureate Leland Hartwell.

To hear Benjamin tell it, Galenea’s work with Otsuka might hinge on whether his firm can deliver at least one compound from the collaboration that the Japanese company decides is worthy of testing in humans. Otsuka has already extended the period of its original collaboration deal with Galenea twice based on the startup’s achievement of certain goals, and the latest extension struck in late 2009 expires at the end of 2011.

For its part, Otsuka Pharmaceutical, which is Japan’s largest privately owned drug company, has a major interest in the treatment of schizophrenia. The firm discovered a blockbuster drug for schizophrenia and other mood disorders called aripiprazole (Abilify), which Bristol-Myers Squibb markets in the U.S. (Interestingly, the company also makes a sports drink called “Pocari Sweat,” which is wildly popular in Southeast Asia, Benjamin said.) Otsuka Holdings, the drug firm’s parent company, says it generated $13.1 billion in revenue for its fiscal year ending in March 2010.

Otsuka’s cash has enabled Galenea to develop cutting-edge technology for discovering potential drugs for diseases of the central nervous system, Benjamin says. For instance, the startup has developed a new way of rapidly screening molecules for ones that impact neuron-to-neuron communication—or synaptic transmission—to treat mental disorders. Recently, the firm won a $4.5 million grant from the National Institutes of Health to further develop the drug-discovery technology. Otsuka is already using the system for its own R&D operations.

Mark Benjamin, CEO of Galenea

Mark Benjamin, CEO of Galenea

With previous grant support from the NIH, the firm has also developed a system for finding patterns in brain activities and physical behaviors in mice to test the effectiveness of drugs for certain mental disorders. It’s a leap ahead of the traditional method of watching how the drugs impact the physical behaviors alone. In fact, there’s a lack of reliable mouse models of mental disorders, making it risky to say whether a drug that appears to work in mice will be effective in humans as well.

In the meantime, Galenea has been pursuing research of drugs that falls outside of its Otsuka deal. In October 2009, the startup bought a compound, which has potential to improve mental abilities in schizophrenia patients, in an auction of assets from the now defunct Lexington, MA-based Epix Pharmaceuticals. Epix, which wound down its operations in July 2009, had shown that the drug was safe in an initial human study. Now Galenea plans to meet with the FDA this fall to talk about starting a new Phase I clinical trial to get further data on the safety of the drug, Benjamin says.

Galenea has also licensed potential anti-obesity compounds from the Woburn, MA-based chemistry research outsourcing firm Organix. Within the next year, Benjamin says, the startup plans to find a partner to take over development of those compounds.

Back to the Otsuka collaboration, Benjamin says he will probably know by early next year whether the Japanese company decides to further develop one of the compounds from the startup. That will be an important milestone for this 46-person company, because it would be a strong statement from Otsuka that it believes it will see a big return on its $90 million investment in Galenea.

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2 responses to “A Nobel Laureate’s Stealthy Biotech, Its Japanese Pharma Backer, and the Englishman In Charge”

  1. Ryan – Very catchy headline! More important- good article

    Mithra Bindhu :-)

  2. Ryo KubotaRyo Kubota says:

    Great article! We love working with Otsuka as well!