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With Startup, Bio Pioneer Tom Maniatis Looks to Spark NY Scene Again

Xconomy New York — 

When molecular biology pioneer Tom Maniatis left Harvard University for New York six years ago, he set his sights on creating the same entrepreneurial foment that he’d come to know in Cambridge, MA.

Many years before moving to New York, he helped found Genetics Institute, one of the biotech industry’s early trailblazing companies. It’s fair to say no part of any of the five boroughs resembles Kendall Square, Cambridge’s biotech hotbed, but Maniatis has already made his mark.

He has helped drive a massive citywide effort to build the New York Genome Center, the Big Apple’s answer to Cambridge’s big genetic sequencing lab, the Broad Institute of MIT and Harvard. Now Maniatis (pictured above) has co-founded a new company, Kallyope, which is backed by three Nobel laureates and has secured one of the largest Series A funding rounds for a New York-based biotech in recent memory.

To keep things in perspective, the $44 million Kallyope has raised, while large for an initial biotech round, is nowhere near the biggest seen in the sector. This year alone, San Francisco Bay Area startups Denali Therapeutics and Gritstone Oncology have raised Series A dollars in the nine figures. In Boston, Third Rock Ventures frequently starts up companies, such as Neon Therapeutics and Decibel Therapeutics, with commitments of around $50 million.

What’s truly unusual about Kallyope (pronounced Kahl-EE-oh-pay) is that it was formed in New York City. The startup is housed in the Alexandria Center for Life Science on the East Side of Manhattan. According to CEO Nancy Thornberry, a veteran drug hunter who spent three decades at Merck, the startup occupies most of the tenth floor. It’s enough space to accommodate Kallyope’s plans to triple its headcount of eight employees by next year, and go well beyond that thereafter.

The science behind Kallyope is from New York as well. The startup aims to explore the biology that links the brain and the gut and develop both medical and consumer products.

It’s all based on the scientific work of three Columbia University professors and good friends: Lasker Award winner Maniatis, Nobel laureate Richard Axel, and Charles Zuker. Axel and Zuker are widely known for important research into understanding our sense of smell and taste.

“[We] talk every day, we share students and postdocs, so we interact very closely,” says Maniatis. “This company has been percolating for two years, and the two years really were necessary to execute this plan.”

New York biotech venture firm Lux Capital incubated Kallyope, and the three founding scientists have put together a syndicate of backers from three of the U.S.’s other big biotech hubs—Boston (Polaris Partners), San Francisco (The Column Group), and San Diego (Illumina).

The investment arm of Kallyope’s landlord Alexandria Real Estate Equities and longtime Venrock venture capitalist Tony Evnin are also backing Kallyope.

One reason the company needs such a big initial infusion of cash is its ambition. Its scientists will be delving into no small amount of biological mystery to understand what’s known as the “gut-brain axis,” a kind of information superhighway between the cells in our guts and the central nervous system. Its commercial ambitions are writ rather large, too, at least for now: to develop drugs for a wide range of diseases and consumer products as well.

Startups like Kallyope don’t come along often in New York biotech. As I wrote earlier this year, when Rockefeller University spinout Rgenix raised $8 million in August, it was one of only three biotechs in the city at the time to get a private round that size or larger in 2015. There isn’t much lab space, an issue that’s still unresolved, and to this point, there are only a few incubators in the city to help startups get on their feet.

Rockefeller president Marc Tessier-Lavigne, who isn’t involved with Kallyope, says that the lack of such lab space remains the biggest hurdle facing companies with “more modest financial backing” than the round the new startup was able to raise. Still, Kallyope coming together “is an incredibly important milestone for the city’s biotech ecosystem,” he told Xconomy via e-mail.

Several factors have come together the past few years to mobilize the New York biotech scene. Many new leaders at New York’s research centers are biopharma veterans, like Tessier-Lavigne, formerly of Genentech, and Weill Cornell Medical College dean Laurie Glimcher, a longtime Bristol-Myers Squibb boardmember. With their industry experience, they’ve pushed academics to commercialize research with industry help.

The academic groups are also moving to collaborate on science, not just compete. That mindset has led to, among other things, the New York Genome Center. It was Maniatis’s brainchild and officially launched in 2011. Life sciences startup creators like Versant Ventures, Accelerator, Arch Venture Partners, and Flagship Ventures have also set up outposts to form New York biotechs. Versant just funded its first, Kyras Therapeutics, which launched this morning.

“During the last five years there’s been more advances in life sciences in New York as they relate to biotech than any of the previous 20 years,” Maniatis says.

For New York to become the biotech hub it aspires to be, there have to be many more Kallyopes, they have to stay in New York, and they have to succeed, and not just end up as failed experiments. If Kallyope and others like it survive and expand, says Lux partner Josh Wolfe, the “narrative” will no longer be that it’s “too expensive to live in or build in New York.” In that sense, Kallyope is an important test case for biotech in the city.

Kallyope is trying to do what Maniatis says couldn’t have been done even five years ago without the variety of genetic and individual cell sequencing tools now available. He is convinced that communication between the brain and the gut has “profound importance” for our bodies. By deciphering the language and identifying the key molecules speaking and listening, we can begin to understand “how the gut is wired to the brain.”

Kallyope isn’t the only group in industry or academia to explore on a molecular level how the gut and the brain communicate, and how that impacts human health. There has been a huge wave of research the past several years into the microbiome, the trillions of bacteria that live in and around our bodies, and how changes to the microbiome might lead to a variety of diseases.

What that work has started to illuminate is the relationship between the gut and other aspects of human physiology—metabolism, anxiety and depression. “Gut biology relative to other areas is in its infancy,” Thornberry says. “There’s much to be learned.”

(Check out this recent piece in The Atlantic, for instance, which details academic exploration of the links between the microbiome and autism and depression.)

Kallyope, however, isn’t doing microbiome research or developing microbiome-based therapies like Seres Therapeutics (NASDAQ: MCRB), which makes cocktails of bacteria to help balance out the good and bacteria in our guts. Rather, Kallyope will try to understand the signals the cells in our gut send out, what receives them, and how that changes our behavior—say, to make us feel full, or anxious, depressed. With that information, Kallyope would develop small molecule drugs or nutritional products to cross up those signals.

Bay Area biotech Second Genome is also developing small molecules to interfere with the chemical signals between bacteria and the gastrointestinal tract, with a program already in the clinic to treat Crohn’s disease, and a research partnership with Pfizer in metabolic disease.

One proposed advantage of targeting the gut brain axis with drugs: they could provide an indirect route to treating neurological disorders. Looking for ways to treat brain conditions—say, depression—via the gut could lead to drugs that don’t cross the blood brain barrier, and would be “much less likely” to cause some bad side effects, Maniatis says.

Still, metabolic diseases would make sense for Thornberry. She was a key contributor in the development of Merck’s blockbuster diabetes drug sitagliptin (Januvia). But Kallyope won’t say specifically which diseases they aim to impact first, which molecular targets they’ve identified, or when the first of these programs should be in clinical testing. Thornberry, Wolfe, and Maniatis also won’t describe the nutritional products they have in mind, except that, according to Maniatis, they are molecules that “interact with the gut system and affect brain activity.”

The company was named after Calliope, the Greek muse of epic poetry, coined by Maniatis, Axel, and Zuker because of their love for the arts. They want Kallyope to start a trend with more new biotechs growing up in the city.

“It would really be great to see that happen, but it’s not going to be easy,” Maniatis says. There is momentum, and there is desire, he says, but as all New Yorkers know, there’s only so much elbow room in the densest city in the U.S. “If we can just work with the city to generate the infrastructure,” he says, “it can really start happening.”

Michael Brown and Joseph Goldstein, who won a Nobel Prize in 1985 for work into cholesterol metabolism, are on Kallyope’s scientific advisory board, as is former Genentech R&D chief Richard Scheller.