Michael Gilman has been in this position before. About 10 years ago, he left an executive research position at Biogen Idec, hooked up with Atlas Venture, and formed a startup called Stromedix—one that got funded, developed a drug, and incidentally was later sold to the big biotech, bringing Gilman back into the Biogen fold.
Now Gilman is at it again. Last summer, over a year after the Stromedix deal closed, Gilman left Biogen again, and reunited with Atlas as an entrepreneur-in-residence. And now his new five-employee startup, Padlock Therapeutics, has secured a big venture round to get going.
“I’m basically a small company guy,” Gilman says. “It’s just what I love to do, I’m good at it, and I want to do it again.”
Cambridge, MA-based Padlock today is announcing it’s raised a $23 million Series A round led by Atlas. Johnson & Johnson Innovation, MS Ventures (the VC arm of Merck KGaA), and Index Ventures are in on the financing as well. The cash will fuel Padlock’s efforts to zero in on what are known as protein-arginine deiminases, or “PAD” enzymes—think of them as rocket fuel for the immune system—and exploit them to make new drugs for autoimmune diseases. Rheumatoid arthritis, lupus, and multiple sclerosis are potential applications for these drugs, though Gilman says Padlock hasn’t decided which way it’ll go first.
Those are big, competitive fields of course. There are several biologic drugs for rheumatoid arthritis—like adalimumab (Humira)—that bring in billions of dollars. But Gilman says that Padlock is trying to combat autoimmune diseases in a fundamentally different way.
Autoimmune diseases occur when the immune system misfires and attacks some part of one’s own body. Almost every drug for an autoimmune disorder counteracts this process by tamping down something in the immune system. Adalimumab, for instance, binds to tumor necrosis factor, a molecule involved in the immune response that characterizes rheumatoid arthritis and a bunch of other autoimmune diseases. But by suppressing the activity of the immune system, such drugs make patients more vulnerable to infections and other complications. The concept that led to the formation of Padlock is, rather than targeting the immune system itself, what if a drug could instead block the antigens, or the molecular beacons that the immune system is being drawn to?
“If you could get rid of the antigens instead, then you have obviously a completely different profile for a drug,” Gilman says.
Presumably, that would mean a drug that wouldn’t leave the body vulnerable to nasty infections and complications. Padlock is attempting to do this by building on work coming out of the Scripps Research Institute from Paul Thompson and Kerri Mowen into PAD enzymes. These enzymes are thought to be implicated in certain autoimmune diseases by transforming normal proteins into slightly modified forms that behave as antigens, spurring the immune system to attack otherwise healthy tissue.
“If you could treat those patients with a PAD inhibitor, and essentially extinguish the supply of fuel to the immune system, you ought to be able to cool the whole thing down,” Gilman says (“Padlock” is a reference to the strategy of locking up the PAD enzymes).
So what makes this a big deal if it works? Take rheumatoid arthritis, for instance. This is where Padlock feels the science, at least so far, is the strongest. Gilman notes that patients with the ailment produce certain unusual antibodies that aren’t seen in healthy people. Many of those antibodies target the antigens produced by PAD enzymes—and they can show up years before the problem has escalated to the point that a person is actually diagnosed with disease. In theory, then, a PAD inhibitor might not just treat rheumatoid arthritis when the disease is established, but prevent people (those with a specific genetic makeup, Gilman says) from getting to that point.
“[That’s] more exciting to me,” Gilman says. “It’s a remarkable opportunity.”
Gilman also sees potential for PAD inhibitors in lupus and MS. In lupus, the idea would be to stop the body from producing antigenic materials that, like in rheumatoid arthritis, cause the body to attack itself. In MS, Gilman, says, there are a couple of different theories of how PAD enzymes might be implicated in damaging myelin, the material that normally acts like wire insulation on nerve cells. One idea is that, as in the other autoimmune diseases, the enzymes cause the proteins that make up myelin to become antigens, drawing fire from the immune system. But it could also be, Gilman says, that in some patients the enzymes are changing the proteins enough that the myelin begins to break down, even without interference from the immune system.
This all has yet to be proven, of course; Padlock’s most advanced experiments to date have been run in mice. And the biology here isn’t completely understood—including, as Gilman says, why PAD enzymes are doing what they do in the first place. That leaves Padlock with a host of challenges and open questions. Among them: Which of the five-member family of PAD enzymes are implicated in these diseases (Padlock so far is homing in on PAD2 and PAD4)? What type of negative impact, if any, will blocking PAD enzymes have on the body? Gilman notes, for instance, that these enzymes might play a role in switching certain genes on or off—but it’s unclear whether that’s “a bug or a feature.”
“That’s something else we’re going to have to sort out,” he says.
Plus, PAD enzymes have been known for a long time, but for one reason or another, haven’t been extensively pursued as drug targets. Gilman says companies like GlaxoSmithKline and a few others have at least initiated PAD programs, but haven’t carried them forward. In some cases, Gilman says, they got tossed out “with the bathwater” in a strategic review. What are the new insights Padlock is bringing to the table? While Padlock has its own IP from Scripps, Gilman says it’s more that the company has a “pile of know how” from its founders, and collaboration deals it’s putting together with the academic experts in the space—the “PAD people,” Gilman jokes. The implication is that exclusively focusing on PAD enzymes is the company’s competitive advantage.
“Honestly if somebody wanted to come after these enzymes, they could,” Gilman says. “But little companies can do things that big companies can’t. We’re going to be all over these enzymes, so I’m not really afraid of competition—and competition is generally good right? You learn stuff from your competitors.”
The Series A is supposed to give Padlock enough of a runway to identify its first lead molecule, and get it to its first clinical trial. It’s drawn down around half of that cash so far, with the rest tied to certain milestones along the way. Padlock will likely need a lot more cash than that to get where it’s going though. This isn’t another one-drug company like Stromedix, which took a fibrosis drug gathering dust at Biogen, advanced it, and then sold it back. Padlock likely will be a more broad, expensive, time-consuming endeavor. But Gilman says that’s exactly what wanted when he went looking for a new company.
“To be doing this again, and to be rolling around in a brand new biology, it’s the stuff I love,” he says. “This is not a flip. There is a lot of biology that needs to be explored. There’s a lot of chemistry that needs to be done here—it’s clearly a very broad footprint that we need to figure out and it’s going to take awhile, and a lot of capital. [But] we’re in it for the long haul.”
Atlas partner Bruce Booth chairs Padlock’s board, which includes Gilman, J&J’s Marian Nakada, MS Ventures’ Nilesh Kumar, and Index’s David Grainger. Todd Huffman of Scripps is a board observer.