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No PhD, “No Fear”: Alice Zhang, 27, Aims Software At Neuro Diseases

Xconomy San Francisco — 

It’s impossible to sum up a person with a word, a sentence, or even a paragraph. We all contain multitudes. But if a picture of 27-year-old biotech CEO Alice Zhang could emerge from a single line, it might be her response when asked to describe her first time through the whirlwind of the annual J.P. Morgan healthcare conference in San Francisco.

“I wasn’t super frazzled by the whole thing,” she said with a slight shrug.

Zhang is doing very unusual things in a very unusual way, starting with running a biotech company in her 20s. Her attitude about it all is rather matter of fact. “My viewpoint is it’s always fascinating to go into a new ecosystem and immerse myself, learn the jargon and all the levers,” she said, summing up her slate of meetings with drug industry scientists and businesspeople at J.P. Morgan.

How new was the experience for Zhang? Less than a year before, she was at the University of California, Los Angeles, studying the way hundreds of genes are interconnected in various neurological diseases. She was just months away from a PhD.

She never finished. Instead, she took the knowledge she had soaked up in the UCLA lab of Daniel Geschwind, a geneticist who specializes in the human brain, and the Boston Children’s Hospital lab of neuroscientist Clifford Woolf, where she spent a year, and started a biotech company, Verge Genomics, in San Francisco. Verge emerged from an oh-so-Silicon-Valley accelerator program to raise $4 million last summer. Zhang quickly surrounded herself with boldface biotech names, some of the top academics in the fields of genomics and neurodegenerative disease, often by cold-calling (or doing the Internet equivalent).

“She came to me,” says Harvard University professor and genetics pioneer George Church, now on the Verge scientific advisory board. “I had heard a little about Verge but hadn’t pursued it until she came and asked. We share an interest in Alzheimer’s disease and the networks of genes involved in neural problems. It struck me as a good combination for the current moment.”

“Alice has no fear,” says Gwen Melincoff, who was a top dealmaker at pharmaceutical firm Shire for a decade. “She reached out to me via LinkedIn. We started conversing like we were BFFs [and] I asked her, ‘Excuse me, do I know you?'” Melincoff is now a Verge advisor.

Verge is using software to analyze the networks of genes that drive neurodegenerative diseases and uncover their Achilles’ heels for drug developers to target. Amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease, is a current project, with Parkinson’s and Alzheimer’s in future plans. Going after these diseases is another facet of Zhang’s ambition: neuroscience has been a massive puzzle to drug developers. They have nearly been shut out in getting Alzheimer’s treatments approved, and have not fared much better in other diseases.

If it makes a convincing case, Verge could license its discoveries to drug companies that are itching for new (not to mention faster and cheaper) ways to tackle these confounding diseases. Later, if Zhang has her way, Verge could graduate from helping the drug developers to becoming a drug developer itself—an age-old ambition in the biotech world.

If Verge were a tech startup, Zhang would be one of countless 20-somethings leaving academia behind to pursue an entrepreneurial idea in Silicon Valley.

But in the biomedical world, the PhD is still the ne plus ultra. People drop out for all kinds of reasons, but not because they’re itching to turn their work into a company. To be that close and walk away? “I can’t think of anyone else who has done it,” says Eric Schadt, chair of the Department of Genetics and Genomics Sciences at the Icahn School of Medicine at Mt. Sinai in New York. (He is on Verge’s scientific advisory board.)

Schadt echoes several other people in academia asked the same question. “Coming out with a PhD and a dissertation is usually the foundation of whatever you’ll do as an entrepreneur,” Schadt says. “But as this becomes more of an information game, it will become more like the tech side: catching that wave when it’s there, instead of finishing [the PhD] and jumping through hoops.”

(One now-famous case of a life-science dropout is Elizabeth Holmes, CEO of beleaguered blood-testing firm Theranos, who never finished her Stanford University undergraduate degree.)

To be sure, high tech and biotech are converging. Genes are being translated into zeroes and ones, rewritten like computer code, and turned back into the stuff of life. Verge advisor Church is stumping for perhaps the most ambitious and controversial example of this convergence yet, the creation of a synthetic human genome.

Meanwhile, our health data are increasingly in the cloud, sliced, diced, and analyzed, with everyone from national governments to insurance companies to drug companies down to individuals wanting to make sense of it.

The convergence is reflected in Valley phenomena like the Y Combinator program, now 11 years old, which provides aspiring tech entrepreneurs a sliver of seed capital and three months of mentoring. The program added biotech to its tech-heavy roster in 2014. Verge was a 2015 graduate.

Building upon software that Zhang brought out of UCLA—it’s in the public domain, no license necessary—Verge combs through genetic data to map out networks of genes and show which ones are being switched on or off in concert over the course of a neurodegenerative disease.

Verge also combines genetics with other data: patient age, gender, other health factors. The software aims to determine which genes are causing disease and which are responding to disease. It’s hard to tell with neurodegeneration, because many of the tissue samples that produce the genetic data are post mortem. The cells are dead, and their genes reflect the end of the disease progression.

For example, in amyotrophic lateral sclerosis (ALS) it seems that about 150 genes are switched off in concert at any given time. This leads to death of motor neurons, which coordinate signals from the brain and pass them into the spinal cord and on into the muscles. People with ALS end up losing their muscle function, but not their intelligence, and typically die because they can no longer use their lungs. Verge thinks it has identified the key genes, known as the “master regulators,” that influence the rest of the network.

It’s akin to mapping out a social network (who are the people wielding the most influence?) or an airline network (which airports to keep humming and avoid system-wide delays?). The software has identified a few of these ALS “hubs” and matched them with FDA-approved drugs that should turn the network back on and prevent neurons from dying. The next step is to test those drugs’ effect in cells and animals models—and in some cases on human cells derived from ALS patients. (When asked about the key genes and drugs Verge has identified, Zhang declined to discuss further details.)

Finding new targets is a constant battle for drug developers. Verge isn’t the only company using genetic analysis to that end, but Zhang and her advisors say they’ve gotten a head start in neurodegeneration.

Saira Ramasastry, a former investment banker and Wall Street biotech analyst, was at Zhang’s side for several J.P. Morgan meetings. She says one pharma has signed up to work with Verge, which can combine the company’s internal data with public data sets to “see how the gene networks light up” for a particular disease. (She and Zhang decline to name the partner or the disease.)

Ultimately, Verge wants to own the drugs moving toward the clinic and not just provide the software helping behind the scenes. “That’s the ultimate value,” says Zhang.

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“There’s a lot more unexpected things being in a startup,” Zhang says. “You have to go with the flow. Learn on the fly.”

Zhang was born and raised in the Washington, DC, suburbs, the only child of Chinese immigrants. Her father was a political refugee, part of the “Democracy Wall” movement of the late 1970s. He fled to the U.S. in the early 1980s, years before the Tiananmen Square protest and massacre, and met Zhang’s mother in the Flushing neighborhood of Queens.

Zhang got a big jolt of the unexpected on her first visit to China, when she was 12. She was with her parents. They landed and were immediately put under house arrest, Zhang says. Authorities interviewed her parents for two days, then sent them back to the U.S.

Several years later, she returned in her late teens to a somewhat more open China to do human rights work in the so-called “AIDS villages,” where people infected during corrupt blood-donation schemes were sequestered and the tragedy was covered up. “That was at first time at an early age I saw people dying without any help, and the moment at which I realized the kind of impact I wanted to have,” says Zhang.

She entered an MD/PhD program at UCLA but soon felt that helping one patient at a time wasn’t powerful enough: “The upside is limited. You can only see so many patients in a lifetime,” she says. And the intellectual side of it—a lot of memorization—didn’t appeal to her. “Honestly there’s so much information to absorb, most people don’t have time to dig into anything too deeply,” she says. “I was often told, ‘Stop asking why, Alice,’ and I finally said, ‘Hmmm, this is not for me.'”

Switching to research in the Geschwind Lab at UCLA, she could ask ‘why’ a lot. She began studying “functional genomics”—the intersection of genes and drugs in neuro-regeneration. She visited Clifford Woolf’s neuroscience lab at Boston Children’s Hospital, which frequently collaborates with Geschwind. It’s a “wet” lab that works with human stem cells and brain tissue, a complement to Geschwind’s focus on informatics. She stayed in Boston for a year, longer than a visitor from a friendly lab would normally stay, to learn to grow neurons and other techniques. “She was in my lab for some time,” says Woolf.

Verge has licensed nothing from Harvard University, which runs Boston Children’s, and UCLA. Woolf and Geschwind say that’s not a point of contention. They wish Zhang and Verge well—“life is about self-realization,” says Geschwind—and they are thrilled that their ideas are being put to the test in a startup. But they’re not entirely happy with how it went down.

On his cell phone, Geschwind pauses to chastise a skateboarder cruising down the sidewalk outside his office. He then explains that leaving a PhD program can be a disruption to others in the lab counting on the departee’s work. A lab leader—a principal investigator or “PI” in lab-speak—is always balancing the need to be an educator and mentor and the need to finish work funded by outside agencies, Geschwind says.

When Zhang decided to start Verge, she asked both Woolf and Geschwind, her dissertation advisors, to help, with company stock as the compensation. They checked their universities’ rules and decided they could not. It’s not uncommon for a professor to start a company and ask his trainees to join. But there is little precedent to manage the potential conflict of a student asking her professor to join. At first, they weren’t sure what Zhang and her cofounder Jason Chen, also a Geschwind lab member, were going after, says Geschwind, “so we decided to recuse ourselves.”

Zhang doesn’t think she could have done anything differently but says, “I’m sad about it. I wish we could have gotten them cleared and have them more actively involved. No two better people could be advising us in this area.”

When Zhang and Chen told Geschwind that Y Combinator had accepted Verge into its program, Geschwind says asked what the company was working on. “When she said ‘network analysis,’ I said, ‘That’s interesting.’ We gave them a structure, a way of thinking about things, and I’m really happy to see those methods used to develop a product,” he says.

“Everyone is in favor of the entrepreneurial side,” says Woolf. “We’re training people to have those skills and motivation. In her case, the only unusual thing was doing it in middle of her PhD program. We need to find the ground rules. We need to find a way to manage this new culture of entrepreneurship.”

Woolf approaches the problem philosophically: If the startup didn’t license technology from their labs, should there still be some consideration for the atmosphere—“the lectures she was attending” and so forth—and the knowledge gained? “It’s a complicated issue, and perhaps unresolvable,” says Woolf.

Could it become a more common situation? For young academic scientists, the job landscape seems grim, and groups like the Future of Research are stumping for biomedical research reform. Advocates notched an important win last month when the Department of Labor changed its overtime payment rules to benefit post-docs, but will student researchers like Zhang wait around for more reform? Techies like Peter Thiel are paying kids not to go to college. Grassroots groups are forming to explore biohacking outside traditional educational settings. “Dan and I say we’re living in a new era,” says Woolf. “The Silicon Valley adventure is spreading into the biomedical world.”

It’s too early to say whether Verge Genomics will succeed, or whether, as Alice Zhang and others believe, software algorithms will help usher new treatments for intractable neurodegenerative diseases. The rhetoric on Verge’s website comes off as premature, if not miscalibrated: “We find new cures for brain diseases 1000X more cheaply and quickly using our proven network algorithms,” one blurb reads.

Zhang says the claim stems from initial proof of concept studies that identified potentially useful compounds at a much higher rate than previous studies—a far cry from “cures.” Chalk it up to a little overzealous marketing, perhaps. But in Zhang’s low-key delivery, one can find a bit of data-centricity—some might call it a tinge of arrogance—that software in the end will sort out the messiness of human brains. Not just those of patients with neurological diseases, but those of researchers as well.

“Scientists are very biased,” she says, because they look for answers in the biological pathways they’ve spent their careers studying. “Our approach is unbiased, we go into the raw data and look at the correlation between genes. We’re trying to take out the serendipity.”