With $2M Seed, Perlstein Lab Tests Unorthodox Rare-Disease Plan

Xconomy San Francisco — 

DIYBio is a hot term these days, as more so-called citizen scientists gain access to biotechnology tools and “biohacker” lab spaces. But how about DIY drug discovery? Independent scientist Ethan Perlstein is trying to prove it’s possible.

After a year bootstrapping an ambitious project to find treatments for diseases too rare to attract drug industry attention, he just raised a $2 million seed round for his Perlstein Lab, with a chunk of the cash coming from publicly traded rare disease firm Retrophin (NASDAQ: RTRX).

In 2013, Perlstein had his doctorate from Stuart Schreiber’s Harvard University lab and five years of post-doctoral work at Princeton University under his belt, but he couldn’t land an academic position. He didn’t want to work for a drug company, so armed with the networking tools of social media, he moved to the San Francisco Bay Area to build his own lab, unaffiliated with a school, company, or other institution.

He now has five full time employees, and two consultants who bring decades of industry experience: former medicinal chemist John Alan Tucker and current Cleave Biosciences CEO Laura Shawver.

“Ethan’s enterprising style may be indicative of the new generation of entrepreneurs,” Shawver told Xconomy. “Twitter, crowdsourcing, more innovative financings than what is traditional. He cold-called me via e-mail, which normally would not even be opened, so you can see the level of engagement that he has.”

His startup has space at [email protected], a San Francisco incubator affiliated with the University of California and sponsored by Janssen Labs, an arm of health care giant Johnson & Johnson.

Of the $2 million seed money, New York-based Retrophin and the Wilsey family foundation in San Francisco have combined to contribute about one-third. The rest has come from angel funders in increments of $10,000 to $400,000, Perlstein says.

Perlstein first caught Retrophin CEO Martin Shkreli’s attention on Twitter, and their exchange led to a meeting at the J.P. Morgan conference in San Francisco.

The Wilsey family, legendary in San Francisco society circles and the subject of a best-selling memoir, is also keen on cures for rare diseases. A great-granddaughter, Grace, has an extremely rare disorder caused by a mutation in the NGLY1 gene; her parents have created a rare-disease foundation with an A-list team of scientists, advisors and board members including Gilead Sciences (NASDAQ: GILD) chief scientific officer Norbert Bischofberger, Nobel laureate Shinya Yamanaka, 23andMe CEO Anne Wojcicki, Amicus Therapeutics (NASDAQ: FOLD) CEO John Crowley, and LinkedIn CEO Jeff Weiner. (The San Francisco Chronicle documented the Wilsey story in April, and The New Yorker had a feature about NGLY1 last week that caught national attention.)

Perlstein has made the NGLY1 disorder and Niemann-Pick type C disease his lab’s first priorities. Both are lysosomal storage disorders, in which patients don’t properly produce the enzymes that break down fatty materials in their cells, but they are far rarer than the ones such as Gaucher’s and Fabry disease that fueled the work of companies such as Genzyme and BioMarin Pharmaceutical (NASDAQ: BMRN).

Perlstein’s heavy Twitter networking and angel crowdfunding match the unorthodoxy of his scientific vision, a blend of old and new concepts. His drug discovery platform is based on what he has dubbed “evolutionary pharmacology.” He believes disease-causing genes can be found across species, and those similarities can make low-cost organisms—yeast, fruit flies, nematodes, and zebra fish—great ways to test drugs.

So Perlstein is building his lab around those four “lower” organisms, has hired full-time scientists with expertise in each, and plans to engineer into the yeast and other beasts the genetic mutations common to those that cause rare diseases in humans. That’s only possible now because of a huge step forward in genetic engineering known in shorthand as “CRISPR/Cas9,” which in a few short years has taken off in biomedical research (and might even turn into a new form of gene therapy in coming years).

Putting chemicals into cells or organisms to see what happens—a phenotypic approach—is how the pharmaceutical industry began decades ago. But in the digital and genomic age, the industry has moved toward “rational” design of therapeutic molecules that fit biological targets, like fine-grained locksmithing.

“The idea of phenotype screening is a little bit of a challenge to wrap my head around,” says consultant Tucker, who was a medicinal chemist with Upjohn in the 1990s. “I like having a target, and if at all possible, a couple of X-ray structures of ligands related to my lead bound to said target. But when we look at the world of approved drugs, a remarkably large fraction of our current pharmacopeia came out of the phenotype approach. I think a reasonable argument can be made that we’ve taken the reductionist approach too far for too long.”

Tucker is helping Perlstein sort through the off-the-shelf chemical libraries to screen for “hits”—in other words, to see which potential drugs have interesting effects in the yeast, fly, worm, and fish models. The more activity across the model organisms, the better the clue that the drug might work against the human version of the disease. “It would certainly give us more confidence to go forward,” says Perlstein.

Even so, there would be a ton of work to do. Compounds with promising activity in the four organisms will then be tested in human cells derived from patients with the specific mutations—what Perlstein calls a “sanity check.” For this, Perlstein will first turn to another recent technological development: a public bank of stem cell lines funded in part by California’s regenerative medicine agency.

Eventually, the drugs that show promise would also be tested in mice as a safety check, a more traditional (and expensive) drug development step that Perlstein won’t be able to avoid. At that point, however, he would ideally have corporate partners helping to pay for the work.

He first must prove that his model works, says Shawver. The drugs screened in his organisms must have an effect—“reverse a phenotype,” as she puts it.

Once that happens, Perlstein’s business idea is to give companies rights to all the mutations within a single gene. For example, Niemann-Pick disease is caused by a mutation of the NPC1 gene. But to date, 200 variations of that mutation have been cataloged, Perlstein says. He won’t be able to go after all of them, but he’d like to find a range of treatments for at least “a set of mutations that capture the majority of patients out there” for any given disease.

Ideally, those sets would entice drug companies to license his lab’s program for an entire disease. “We’re a preclinical company. If we don’t have co-development partners, these compounds won’t go anywhere,” Perlstein says.

There’s one other twist in the unorthodox story: Perlstein has registered his startup as a “B-Corp,” or public benefit company, which puts social responsibility at the core of its mission. (Outdoor gear maker Patagonia was one of the first.) The designation gives management a legal shield against lawsuits if, at any point, shareholders want to move the company away from its socially responsible remit. It’s an untested principle, but it gives Perlstein yet another unusual idea to work with as he tries to expand the range of treatments for rare diseases.