Kaleetan Seeks to Stand on Dendreon’s Shoulders, With Immune Therapy for Cancer

Lots of biotech companies around the country are grasping for the title of “the next Dendreon,” including one fledgling startup here in Seattle, Kaleetan Pharmaceuticals.

Dendreon (NASDAQ: DNDN) has become one of the nation’s hottest biotech stories of the year, after it made history in April, winning the first FDA approval for a prostate cancer drug that actively stimulates the immune system to fight the cancer like a virus. This advance came after about a century of research fits and starts, loads of skepticism, 15 years of concentrated effort at one company, and hundreds of millions of dollars. After all that, it has paid off with a company now worth more than $5 billion, and a drug projected to exceed $1 billion in U.S. sales in a few years.

Important as the approval of sipuleucel-T (Provenge) has been for Dendreon’s employees, investors, and prostate cancer patients who might personally stand to benefit, there is still plenty of room left for improvement. That’s the founding idea of Kaleetan (pronounced cal-ee-TANN).

“Dendreon has led the way and shown the importance of dendritic cells in the fight against cancer,” says Kaleetan co-founder Grant Risdon. “You have to give them credit for sticking it out.” But the next logical step is to develop a genetically engineered protein drug that can stimulate the same immune activity, without all the complicated logistics Dendreon has developed over the years, Risdon says. “Ours is more of a classic biotech drug,” he adds.

The startup is long on scientific reputation, and light on capital, at least for the moment. The founders include Jeff Ledbetter and Martha Hayden-Ledbetter, the husband and wife scientific team that co-founded Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN), as well as Cassian Yee, one of the immunotherapy experts at the Fred Hutchinson Cancer Research Center. The operations in the early days are being headed up by CEO Alan Wahl, a veteran of Trubion and Seattle Genetics, and Grant Risdon, an immunologist-turned-business development guy. Risdon told me about the company’s plans a couple weeks back during a meeting in South Lake Union.

The idea was first described in these pages by my colleague Thea Chard when Risdon presented at the Technology Alliance’s Innovation Showcase event last month. Kaleetan’s idea is to develop a standardized injectable protein drug that works to “teach” dendritic cells to be a lot smarter. These cells are important, because their role is to recognize biological markers of invaders, and process signature bits, and present them to other immune cells that can attack them like a virus. The hope is to pull off this trick with a cheaper and logistically easier way than Dendreon’s method, which requires that blood be drawn from an individual patient, and that the dendritic cells be separated out, incubated with a protein marker found on cancer cells, and then re-infused into the patient a few days later.

What Kaleetan mainly has at the moment is some intellectual property for making genetically engineered fusion proteins. This is a platform it calls ADAPT, which is designed to hook together proteins in such a way as to overcome one of the fundamental challenges that has plagued immunotherapy for years. The idea is to assemble the proteins so that the immune system truly recognizes them as an invader that must be attacked, and not just another protein that looks like healthy tissue, and should be avoided.

This gets into some heavy duty, complicated immunology in a hurry, which I’m not going to dive into here. But in its prospectus to investors, Kaleetan certainly describes an interesting concept. Kaleetan isn’t saying which antigens—protein markers on cancer cells—it is pursuing, although it says its method will allow it to activate specific receptors on dendritic cells “potently and selectively.” This is different than a lot of classic vaccine approaches in the past, which often stimulate a generalized heightened state of immunity, and which struggle to really unmask cancer cells as invaders and attack them, because they often look to the immune system like healthy cells.

Kaleetan is still in its very early days. It is essentially aiming to raise about $3 million, to run a lean operation that should enable it to manufacture small batches to run experiments in dogs, Risdon says. The company’s prospectus says it is focusing on carcinomas, and blood cancers, as well as an immune-boosting treatment for chronic hepatitis B.

One reason for choosing dogs for cancer studies is that they have similar antigens to those found in humans, and another is that more and more canine oncology centers are springing up around the country with capabilities of running multi-center, randomized preclinical trials. The plan is to treat 30 to 50 dogs, on a budget of about $1 million to make the drug and conduct the trial, which could yield the data needed to enter a clinical trial. With $3 million to $6 million, Kaleetan figures it could get through a Phase I clinical trial.

With all the buzz around Dendreon, and the big-time scientific founders, I remarked to Risdon that in years past, an idea like Kaleetan’s could have easily gotten $5 million or more in seed funding. Not so in 2010, as investors have grown more skeptical of some very basic assumptions about biotech. The multi-year slog toward getting valuable data and the many years of big losses no longer seem worth it, given the paltry returns of so many companies. For every Dendreon, there are probably 100 other companies that burned through their capital and never generated value. It’s a sobering lesson to entrepreneurs, and it’s forcing lots of resourceful thinking, about things like getting the maximum bang for the buck in a dog trial, and getting through Phase I on a shoestring. But that’s what Kaleetan is seeking to do, and will have to do, if it wants to ever approach what Dendreon has done for prostate cancer.

“We think we can get an early signal of efficacy, and our hope is that we can get there without very much investment,” Risdon says.

Trending on Xconomy