X-Chem, Aiming For Tough-to-Drug Targets, Cuts Deal With AstraZeneca

Xconomy Boston — 

Little information has been made public about Waltham, MA-based X-Chem since it started up in early 2010. But the startup has come up for air to give the type of announcement that every drug discovery company craves: a member of Big Pharma has snapped up a few drug candidates that its technology helped identify.

X-Chem revealed two pieces of news on Tuesday: first, that it has been in a partnership with AstraZeneca (NYSE: AZN) since May 2012. It’s a two-year collaboration through which the pharma giant is leaning on X-Chem to find new small molecule drugs. But more importantly, that partnership has progressed to the point that AstraZeneca has licensed three potential drug programs coming from that discovery work: two directed at protein-protein interaction targets implicated in cancer and respiratory/inflammatory diseases, and one focused on an antibacterial target known to be difficult to make drug candidates against, according to X-Chem chief business officer Diala Ezzeddine.

While X-Chem didn’t disclose the financial terms of the licenses—or the details of the AstraZeneca partnership overall— it’s a big step for X-Chem because it marks the first time an industry player has licensed potential drug programs coming from its discovery platform.

“It validates the fact that we’re generating compounds with bona fide lead potential,” Ezzeddine says. “[T]hat is really the core of our business model, it’s what we’re looking to do for our partners.”

X-Chem was formed in 2010 by co-founders Richard Wagner (its president and CEO), Gordon Binder (the former chairman and CEO of Amgen), and his son, Brant Binder. The company has raised just over $8.5 million to date, with most of that figure coming from an investment in 2010 from Pharmaceutical Product Development (PPD), the large contract research organization, Wagner says.

The startup has 32 employees and certain additional consultants, and through the PPD partnership, also has the ability to tap chemists working for PPD subsidiary BioDuro.

X-Chem isn’t disclosing how much cash it has in the bank, but it doesn’t need to raise additional funds for operations anytime soon, according to Wagner.

Like many other companies in the crowded field of drug discovery, X-Chem is built around a technology that is supposed to help pharmaceutical companies and others screen for leads to potential drug candidates. It brings in cash through milestone payments and royalties should its partners pick up those lead compounds, and develop them into drugs.

X-Chem’s platform is a comprised of a few different services: a proprietary library of small molecules, a combination of drug screening approaches—some generated in-house, and some that have been used by others—and chemical informatics tools and experts to look at the data and find the right molecules, according to Wagner. X-Chem is applying that approach to disease targets that are historically difficult to drug with small molecules, such as protein-protein interactions, epigenetic targets, antibacterial targets, or ubiquitin ligases.

“For very difficult targets like this, you need an integrated suite of technologies to do it,” Wagner says. “It’s not a one-stop shop kind of thing, you need quite a bit of expertise around it.”

X-Chem’s ability to prove that approach is different than the competition will come from both its ability to secure partnerships, and have those partnerships lead to real drugs.

To this point, X-Chem has only made one partnership public: a deal with Roche in 2010 to help the pharma giant discover drugs. And while Ezzeddine says X-Chem “successfully” completed that partnership—it’s no longer ongoing—she wouldn’t specify how.

Even so, X-Chem officials say they’ll soon be disclosing more about the work the company has been doing in stealth mode. Ezzeddine says that X-Chem has other similar partnerships in place with several large pharmaceutical companies, academic institutions, and biotechs—though, at least as of yet, she couldn’t reveal just who those deals are with.

“We’re hoping we’ll be announcing more in the future.” Ezzeddine says.