Far from it.
Allozyne, one of the startups that graduated from the Accelerator biotech startup incubator, has been making huge strides behind the scenes, based on what I gathered from an exclusive interview this week with CEO Meenu Chhabra. The biggest news is that Allozyne has now gathered what Chhabra calls “very promising” results from its initial clinical trial of a longer-lasting multiple sclerosis drug. Full details aren’t yet available, although Allozyne is planning to issue a press release and to present the data in a scientific forum, Chhabra says.
That might have been enough to secure more capital, but the company didn’t stop there. It has also shown that its technology, originally licensed from the Caltech, could be used to make scalable and reproducible quantities of a two-pronged “bi-specific” antibody drug for a hot target against inflammatory diseases. The company has shown it can do more than just make small proteins and fragments of antibodies in fermenters with E. coli bacteria. Its techniques can also be extended to commonly used mammalian cell hosts that are better at producing full-length antibodies like the ones that sell for more than $30 billion a year to treat cancer, rheumatoid arthritis, and other diseases. And last, Allozyne has secured a research partner in the form of an undisclosed Big Pharma company that will extend its cash runway.
Allozyne has done all of that in the past couple of years with 25 employees, and without completely burning through the $30 million it raised in October 2007 from MPM Capital, OVP Venture Partners, Amgen Ventures, Arch Venture Partners, and Alexandria Real Estate Equities. Chhabra, a former Novartis dealmaker, said she’s done it with line-by-line budgeting in which she personally scrutinizes the tiniest expenses. She has saved more than $1 million in salaries by insisting that she and chief scientist Ken Grabstein handle all the key executive functions—operations, business development, finance, medical affairs—by themselves. She provides box lunches, not fancy dinners, for board updates. The CEO with the Novartis pedigree even flies coach herself, uses frequent flier points, and only lets her team attend a couple key conferences a year.
It might just sound like prudent business in a downturn, but OVP managing director Carl Weissman says the company’s recent achievements amount to “incredible progress.” Chhabra and the Allozyne team have adapted, he says, to “the new realities of venture-backed biotech.”
Chhabra, who says she likes to use visual analogies to explain things, put it this way:
“I had this beautiful bulb in front of me to plant when I joined Allozyne,” Chhabra says. “We’ve planted the bulb, and it has sprouted a lot of things.”
Before I dive into the nitty-gritty details of Allozyne’s progress from the past year, a little background is required. Allozyne was founded in 2005 with technology from William Goddard and David Tirrell at Caltech, and incubated at Accelerator in Seattle. The Caltech scientists, as I described in this October 2008 feature on Allozyne, discovered a way to essentially snip out a certain amino acid found in the backbone of protein drugs (methionine), and replace it with a genetically modified amino acid that can stick like Velcro to other molecules. This is sort of like plugging in a Lego block, which performs a certain function wherever researchers want on the backbone of the molecule.
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