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From Yeast, Yumanity Looks to Give Rise to Critical Neuro Drugs

Xconomy Boston — 

Two weeks ago, in a sixth-floor room in San Francisco’s Four Seasons Hotel overlooking Market Street, Tony Coles, Susan Lindquist, and Kenneth Rhodes met with one financier after another in a campaign to raise money for their new Cambridge, MA-based startup, Yumanity Therapeutics.

Their pitch centered around yeast. “[Yeast] is where statins were first identified,” Coles said, pointing to a slide Yumanity was showing to investors.

He’s referring to the landmark cholesterol-lowering drugs, like atorvastatin (Lipitor), which changed cardiovascular care and became some of the best-selling drugs of all time. They were discovered decades ago by a Japanese researcher who saw that statins were being secreted by fungi to kill other fungi.

Yeast is a simple organism, but Yumanity is putting it at the heart of an extremely complex undertaking, even by biotech standards.

The new company is using yeast to build a process Coles (pictured above) boldly contends has the potential to “transform” the way drugs are discovered. It’s souping up an old screening method with genetic tools and stem cell technology, with an exceedingly tough goal in mind: finding treatments for neurodegenerative disorders like Parkinson’s, Alzheimer’s, and amyotrophic lateral sclerosis (ALS).

These diseases aren’t well understood biologically. They’ve bedeviled scientists and pharmaceutical companies alike for decades. Billions of dollars have been spent discovering and testing therapies for them, and most have come up empty. Yumanity thinks it’s found a method that might help crack the code, to find new angles to attack these devastating diseases and increase its odds of success.

“This is as good as it gets at the earliest stage,” Coles said of the company’s approach.

What’s more, Yumanity’s leading trio is bucking the traditional venture-backed biotech model. Building the team is first, funding the company is second; Coles and Lindquist used their own money to seed Yumanity, brought in Rhodes, and launched the company in December without a venture investor or a big round of cash. They were at the J.P. Morgan Healthcare Conference earlier this month looking for that round, which Coles wants to close by the end of March.

Coles also wants enough funding to get the company through “several key milestones.” He won’t say how much Yumanity is looking for, or what those milestones are. But he was clear that he wants Yumanity to be set for a long period of time.

“We don’t want to raise money every 12 to 15 months,” he said.

It’s an atypical way to start a life sciences company. But Yumanity has unusual star power behind it. Coles is a wildly successful biotech executive who most recently steered Onyx Pharmaceuticals to a $10 billion buyout in 2013. Lindquist is a National Medal of Science winner and a member and former director of the Whitehead Institute. And Rhodes is a former Biogen Idec (NASDAQ: BIIB) neurology executive.

They’re making a complicated and tantalizing pitch to investors that entails enormous upside and risk, and a potentially long wait for any data in human beings—the real proof point for any drug developer. Coles isn’t disclosing how long he thinks it’ll be, for instance, until Yumanity gets to its first clinical trial.

But it’s an investment that’s more likely to happen these days, when dollars are pouring into early-stage biotechs. Moderna Therapeutics, for instance, just raised $450 million and is still anywhere from one to two years away from its first clinical trials. Juno Therapeutics (NASDAQ: JUNO) raised more than $300 million and went public in less than a year. Coles points to both companies, specifically, as non-traditional investment examples that came to mind when he first discussed how to build Yumanity with Lindquist in May.

“They just did it a different way,” he said of Moderna and Juno. “And given the size of this opportunity and the enormity of the challenge in neurodegenerative diseases, this seemed like the one that, as we were chatting, deserved a special approach.”

We’ll soon see what that approach is. A mega-financing round? A small one accompanied by a large deal with a pharmaceutical company for non-dilutive cash? Coles will only say the company is exploring all options, and that it’s too early to turn any of them down. Several outside observers I spoke with were confident that even with the questions surrounding Yumanity, Coles’s track record alone—between restructuring NPS Pharmaceuticals (just sold to Shire for $5.2 billion) and turning around Onyx—would be enough to bring investors to the table.

“Tony has been so successful that he’s likely to attract the right kind of funding for the first few years,” said Elliott Sigal, the former R&D chief at Bristol-Myers Squibb, where Coles worked many years ago. (Sigal has no ties to Yumanity.) “But the important questions for him are what is the time to clinic? And what’s the human validation that they’re going to end up with [from] these targets?”

Lindquist said she chose to build a biotech in this atypical way because of her past experience with FoldRx Pharmaceuticals, the first company to come out of her work. Lindquist is a pioneer in the field of protein misfolding—a common biological mistake that occurs when long linear chains of amino acids morph into three-dimensional proteins. To function properly, proteins have to fold precisely.

When they misfold, they can cause “cascades of destruction” and “wreak havoc” on a cell, as Lindquist put it. They can accumulate into clumps or plaques, for instance, like amyloid beta in the brains of people with Alzheimer’s, or so-called Lewy bodies in Parkinson’s patients.

Lindquist has won a number of honors for her work on this complex origami, how it might come into play in a variety of diseases, and what it might take to “straighten out” these misfolded proteins. Among the honors are the Sigma XI William Procter Prize for Scientific Achievement in 2006 and the National Medal of Science in 2010.

In 2004 she co-founded FoldRx with The Scripps Research Institute’s Jeff Kelly. That company, Lindquist said, consisted of two things: “near-term chemistry” from Kelly that led to the drug tafamidis (Vyndaqel) for a protein folding disease called familial amyloid polyneuropathy (FAP); and a “very early-stage [drug] discovery platform” Lindquist was developing, which she described as a “primitive, earlier incarnation” of the process Yumanity is using today.

The company raised $90 million from Alta Partners, Fidelity Biosciences, and others, but the Great Recession derailed IPO hopes. Instead, Pfizer bought it in 2010 for its lead drug, which is now approved in Europe and Japan to treat FAP.

Lindquist said she “took back” her discovery work, which at that point wasn’t ready for prime time: “It was not right to be folded into a very large pharmaceutical company.” Chiefly, Lindquist wasn’t able to do with it then what she believes Yumanity can do now: identify drug targets.

Lindquist praised FoldRx’s VC backers, but after that experience she vowed she would do things differently the next time around. She wanted to hand-pick her next team, rather than have investors do it for her. She wanted to be more at the forefront of her company and to have more of a finished product to build it around.

“I learned that doing the investment right and getting the team were inextricably linked,” she said. “I wanted to get the people that I wanted to work with together first, because I want to stay very much involved with this. I really, really care deeply about this.”

She found Coles and Rhodes along the way through FoldRx. Coles came aboard as an independent director, and the two became fast friends. Rhodes did due diligence on FoldRx for Biogen before Pfizer swooped in. When her technology had come far enough, she called both of them. The first conversations took place in May; Yumanity officially emerged from stealth in December.

That type of story, in itself, is unusual in biotech. But so is what Yumanity is trying to do scientifically. The company is trying to discover drugs for difficult to treat diseases by moving up and down the evolutionary ladder.

First it tests drugs for an effect in a simple organism (yeast), then a complex cell (a human neuron). If both models produce a promising biological effect, Yumanity will go back to the yeast to figure out what’s happening. The idea is that disease-causing cellular machinery is preserved in evolution; signs that a drug might quell a disease in yeast might indicate that it could work in humans too.

Yumanity scientific founder Susan Lindquist

Yumanity scientific founder Susan Lindquist

The idea of using yeast to help discover drugs isn’t new. Yumanity is different because of its mix of what’s known as phenotypic screening—putting chemicals into living cells or organisms and seeing what happens without necessarily knowing why it’s happening—and “rational” drug design, or building drug molecules to fit the structure of specific biological targets, like a lock and key.

Phenotypic inquiry was at the foundation of the drug industry before massive computing power and understanding of molecular biology exploded. Phenotypic screens are still used, but they have largely given way to rational approaches because, as Rhodes said, “it’s very hard to find a target [with a phenotypic screen],” and researchers have a hard time figuring out “how [their] molecules work.”

Seeing an effect and figuring out why is particularly important in diseases like Parkinson’s, Alzheimer’s, and ALS, because there is so much underlying biology that isn’t understood.

For instance, many researchers believe clearance of amyloid-beta plaques from the brain of Alzheimer’s patients is the key to solving the disease. But drugs developed to do just that haven’t made patients any better.

Different biological targets, and new ways to unearth them, are sorely needed. Yumanity has already announced that it has found a novel target for Parkinson’s.

So why all the fuss about yeast? Yumanity inserts genetic instructions into the organism to produce proteins known to misfold and cause devastating diseases in humans. The yeast cell reacts similarly to a human cell when the bad proteins are produced. Yumanity is using them as models for disease—“living test tubes,” Lindquist said.

Once it has its Parkinson’s or Alzheimer’s yeast model, Yumanity tests hundreds of thousands of compounds in those altered yeast cells and hopes to get “hits”—at least a few compounds that, in Lindquist’s words “solve the problem”: they stop the cascade of events that occur after the folding error, the mistakes that trigger disease.

Yumanity then tests the successful compounds in human nerve cells evolved from stem cells of patients who have a specific disease-causing mutation. If a compound works there, too, Yumanity then goes back to the yeast to figure out why: which target does it hit? What’s the mechanism of action? Which genes are involved?

The potential advantage of building an evolutionary bridge, of sorts, between yeast and humans, is that Yumanity could have a pretty good idea of a drug’s effect before it’s more extensively tested in mice or primates.

But isn’t this back-and-forth approach time consuming and hard to scale? Yumanity executives said no, although Coles declined to explain the “secret sauce.”  He did say, though, that most of the work takes place in-house.

Another advantage is cost.

“Yeast strains are dirt cheap,” said Ethan Perlstein, a scientist in San Francisco who is bootstrapping a phenotypic effort to use yeast, zebrafish, fruit flies, and worms to find drugs for rare lysosomal storage disorders.

Outsiders we spoke with were skeptical that Yumanity’s system would carry over into real humans. They don’t know all the details behind Yumanity’s screens, but they’re also scientists who have done drug discovery for decades.

One, who declined to be identified, said that while he thinks the biology is “terrific,” Lindquist is “brilliant,” and Yumanity just might uncover some new insights, that there’ll be a translational problem. “While biology is generally well preserved across evolution, disease is not,” he said.

Former Bristol exec Sigal agreed. “I’m not sure of the connection to the human for all the approaches they have,” he said. “There may not be translation from yeast to mammalian cells, from cells to in vivo models, and from in vivo models to humans.”

Which brings us back to that slide deck, the hotel room overlooking Market Street, and the one slide Yumanity wanted to burn into investors’ brains: Some of the world’s best-selling drugs came from experiments with yeast.

“This isn’t to imply that all of these classes of molecules were first discovered in yeast and then moved into the clinic,” Rhodes said, holding up the slide. “But we use it typically to illustrate the fact that there’s tremendous conservation of the pharmacology from yeast into human cells. It helps people get more comfortable with the idea that the molecules we find in yeast will actually hit human targets with roughly the same potency and specificity.”

Will they be comfortable enough to spread around a lot of dough? The answer should arise soon enough.