Using Frugal Business Model, Orphagen Targets Orphan Receptors

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a research investigator at Allergan. He retains a hand in guiding Orphagen’s science strategy, but he has spent the bulk of his tenure as CEO building a large network of support to draw on for technology and expertise.

Their first laboratory space was sublet from the Human BioMolecular Research Institute, a nonprofit founded in San Diego in 1997 to conduct biomedical research to understand and ameliorate human diseases and disorders related to the central nervous system. Thacher says his team used screening equipment that was purchased for about $100,000; “that was one of the preconceptions I had to get over, which was that you needed $10 million dollars to do screening.” It wasn’t highly automated, but adding a few manual steps to the process reduced the upfront costs and kept Orphagen’s scientists on top of screen quality, a critical variable to finding new compounds for the orphan receptors.

Later on, Vencore, a venture leasing company, provided an $80,000 leasing line for capital investment. “You have these circles of people that believe in you,” Thacher says. Indeed, Orphagen also negotiated about $350,000 worth of chemistry work on a deferred basis, which was repaid with earnings from a pharmaceutical partnership they signed the following year.

Conducting an independent scientific program also has been challenging. Thacher describes Orphagen as “disease agnostic.” They have followed their molecular discoveries to the biology of various autoimmune diseases, retinitis pigmentosa, Cushing’s syndrome, and even circadian rhythms.

It’s an unorthodox approach, and compiling expertise in different areas has required ongoing collaborations. “We’re constantly reaching out to people in academia to get technology and ideas,” Thacher says. A lab at UC San Francisco gave practical help designing necessary assays; others shared theoretical advances and advice on selecting mouse models. Despite going it alone, Orphagen is embedded throughout the drug discovery ecosystem.

Splitting the focus of their lab across a range of orphan nuclear receptors would not be possible in an academic setting, nor would it be endorsed by outside investors, who are compelled to pick winners. Yet Thacher maintains there are benefits to a broad approach. “In an industrial setting like ours you are going after multiple targets, so you are constantly learning things by … Next Page »

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