Arzeda, Maker of Designer Enzymes, Prepares to Leave UW Roots with New Leader and VC Bucks

One of the biggest startup ideas at the University of Washington is getting ready to leave the academic nest. Arzeda, which designs custom-built enzymes on computers that can do things Mother Nature never could, has recruited Michael Martino as its CEO and secured commitments from OVP Venture Partners and WRF Capital to anchor its founding $12 million Series A financing round, Xconomy has learned. (The deal hasn’t closed yet, but that’s expected in April, Martino says.)

I caught up with the company’s three scientific founders—Eric Althoff, Daniela Grabs, and Alexandre Zanghellini—earlier this week at their temp digs in the UW TechTransfer office. They were eager to tell me all about the company they are building, and why it has enticed an experienced public company CEO like Martino (formerly of Bothell, WA-based Sonus Pharmaceuticals) as well as the investors to get on board.

The first thing to know is that Arzeda (Ar-ZAY-duh)  is all about enzymes. These complex protein molecules do all sorts of essential jobs in the human body, and are found everywhere in nature. Enzymes in your stomach chop up the steak you eat for dinner, and break down drugs like aspirin in the liver. Scientists have manipulated these handy molecules for all sorts of industrial uses, from cleaning up oil spills to detergent ingredients. Denmark-based Novozymes is one example of a dominant player in the industrial market, while Cambridge, MA-based Genzyme has become one of the world’s biggest biotech companies by making engineered copies of important enzymes for people who suffer from hereditary deficiencies, like the one that causes Gaucher’s disease.

What those companies have in common is that they start from a cookbook dictated by Mother Nature, from which they can make incremental tweaks. But after a decade of research in the UW lab of biochemist David Baker, supported by supercomputers, the Arzeda trio has found a way to design custom enzymes on a computer screen, with all sorts of ideal properties beyond the scope of other companies that essentially start with an enzyme from nature. They have shown it can be done in publications in Science and Nature, and the next step will be to do this in a larger scale commercial setting.

“We don’t need a starting point with an enzyme. We don’t need to improve on the starting point. We design the starting point,” Grabs says. Zanghellini adds, “We are expanding on what nature does.”

Lots of things still need to fall into place before Arzeda can really start humming to execute on this vision. For starters, it is getting a license from the UW to an academic software program called Rosetta that has been modified for commercial use, as well as a few catalytic components for enzyme reactions, plus some full-blown patented enzymes the founders worked on with Baker at the university.

Then comes the financing. Besides OVP and WRF, Martino said he is still courting … Next Page »

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