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Excaliard, an Isis Spinoff With Anti-Scarring Drug, Marches Ahead in Clinical Trials

Xconomy San Diego — 

Isis Pharmaceuticals (NASDAQ: ISIS) likes to talk about how its gene-silencing technology known as antisense creates so many innovative ideas for new drugs that it can’t commercialize them all itself, so it spins a few off into what CEO Stanley Crooke calls “satellite companies.” One of the more interesting ideas orbiting around Isis in Carlsbad, CA is a startup called Excaliard Pharmaceuticals.

This company is the brainchild of Nick Dean, who spent 13 years at Isis, including a stint as vice president of functional genomics and oncology before he became the founder and chief scientist of Excaliard in 2006. The idea was to take one of the most intriguing projects on the back burner at Isis—a new drug that could curb excess skin scarring—and make it the foundation for a new company.

“It was a bit of a skunk works thing, that people worked on after hours, on weekends, or with academic collaborators,” Dean says. “It never quite made the cut at Isis, because the company was focused on cardiovascular disease and metabolic disease.”

But Excaliard found a receptive audience two years ago from Alta Partners, ProQuest Investments, and RiverVest Ventures, who pumped $15.5 million in Series A financing into the company. Two years later, Excaliard is still a virtual company with just four employees, but it has made a lot of progress—it is on track to complete enrollment in its first clinical trial by the end of this year, and start a more rigorous mid-stage trial in the first half of 2010, Dean says.

The concept at Excaliard is to protect the body from excess scarring and fibrosis, Dean said. The Excaliard drugs use antisense technology to silence specific genes that control scar formation and fibrosis at the site of wounds. The company has its eye on developing this as a way to make scars less visible and bumpy, like those from the 1 million Caesarian section births performed each year, knee surgeries, and reconstructive plastic surgeries. It could also be used for some rarer dermatology conditions like hypertrophic scars that are red, raised, itchy and swollen, or keloids, that are large and raised above the skin like a benign tumor.

Dean was intrigued partly by the science, and partly by the market opportunity. The science is built on increasing knowledge of genes that control pathological scar formation, as well as proprietary compounds that Excaliard says can be delivered in a localized part of the body to curb that excessive scarring.

From a business standpoint, this is an untapped market, with no real effective therapy approved by the FDA that works the same way. Patients get by with lotions, creams, or corticosteroids that control swelling but don’t really fix the root of the problem. Any drug like Excaliard’s will need to pass FDA muster, but at least for the 3 million cosmetic surgeries performed in the U.S. each year, it wouldn’t have to deal with insurance reimbursement hassles, because patients generally pay out of their pockets. If it were used for general surgery, it could tap a bigger market of possibly 20 million procedures a year or more, Dean says.

How is it supposed to work? The dose of the Excaliard drug is given after the wound is made, through an injection, not through a topical cream, Dean says. That makes it more useful for scars that cover small surface areas, like incisions. “This is not for burn victims,” Dean says.

Getting the dose, the delivery, and the sequence of operations right will be key to making this a success. Because when the body is wounded by an incision, a certain amount of immediate inflammation is natural and necessary to help the wound heal. Excaliard’s challenge is in determining when the inflammation has done its job, and when the remodeling of new scar tissue to seal the wound turns excessive.

Dean used an evolutionary example to make his point about how the body reacts to wounds and forms scars. If you were on the African savannah and got bitten by a lion, you’d want the wound to close up and heal as quickly as possible.

“Of course here in San Diego, people aren’t getting bitten by lions anymore,” Dean says. So that means the body is naturally inclined to overreact with not just inflammation, but growth factors to seal the wound over time, which would be good if it were the savannah, but not so much in a less dangerous environment. To be more specific, he said Excaliard is dampening this wound response by blocking a gene (which Dean isn’t disclosing yet) that triggers excess production of collagen and other fibrotic components that form bulky scars.

To build on this idea, Dean explained the wound healing process in three phases. First comes the inflammatory phase, in which white blood cells flock to the site of injury to ward off any foreign pathogens that might cause an infection once the skin is broken. That passes quickly, usually within a week, and is followed by more prolonged phases in which cells in the injured area proliferate and remodel connective tissue and growth factors to form a protective barrier around the wound.

“You want it to heal, but not scar,” Dean says.

The only competitor pursuing an idea like this is U.K.-based Renovo, which is further along with a pivotal clinical trial in Europe of a protein drug for scar reduction. Dean says his company’s drug is a specific small molecule (actually an oligonucleotide) that’s different from Renovo’s protein drug, and that the Excaliard treatment is designed to work through a different biological mechanism. But he didn’t say too much more about differentiating factors, or about the company’s clinical strategy.

He did, however, tell a fun little anecdote about the name. It is inspired by the legend of King Arthur, and the famous sword Excalibur, which was supposed to protect warriors from injury in battle. But Dean noted that it only worked in combination with the magical scabbard to protect it. Speaking metaphorically in this case, the drug is the sword, and the smooth, even scar is like the scabbard it needs to work in.

“It’s really about protecting people from scarring,” Dean says.