Fresh off a quick exit for his latest biotech startup, former Dendreon CEO Mitch Gold has a couple of new projects up his sleeve—but he’s not letting on much yet.
Xconomy caught up with Gold on Wednesday after he gave a talk in Madison, WI, about the impact of low-cost genome sequencing and the scientific opportunities and challenges of gene editing. His speech was part of the Bioscience Vision Summit hosted by Wisconsin biotech trade group Bioforward.
The University of Wisconsin-Madison graduate is a well-known figure in life sciences circles, for better or worse, after a rocky, high-profile quest to help Seattle-based Dendreon (NASDAQ: DNDN) commercialize the first cancer immunotherapy.
On one hand, Dendreon made history by beating the odds to win FDA approval of that therapy, sipuleucel-T (Provenge), in April 2010 to treat prostate cancer.
On the other hand, sipuleucel-T never reached the starry heights Dendreon had envisioned. Gold raised about $2 billion to help Dendreon bring the drug to market and pocketed almost $27 million in two days of share sales after sipuleucel-T won FDA approval, but Dendreon has since been on a downward spiral. Marketing struggles, reimbursement questions, and other issues doomed the drug’s launch, and new prostate cancer drugs like abiraterone (Zytiga) and enzalutamide (Xtandi) have since grabbed market share.
Dendreon started bleeding cash, and Gold was replaced by John H. Johnson in 2012. (Johnson has since been replaced by W. Thomas Amick.) Gold later stepped down from Dendreon’s board. Regulatory filings show the company could face potential insolvency. It lost $296.8 million on $283.7 million in sales in 2013.
Using the wealth he amassed while at Dendreon, however, Gold moved back to the biotech startup world. He founded a cancer immunotherapy startup, Alpine Biosciences, in 2012. A year later, Gold started a Seattle-based biotech hedge fund called Alpine BioVentures. And just two months ago, Gold flipped his two-year-old startup to Seattle-based Oncothyreon (NASDAQ: ONTY) for $27 million in an all-stock deal worth 10 percent of Oncothyreon.
Gold’s hedge fund—which he started with David Miller, a former investment analyst who covered Dendreon—has invested in more than 20 companies, primarily targeting cancer, he told Xconomy. The fund has already generated some returns, although Gold wouldn’t share details. He plans to seek limited partners to grow the fund.
“Our number one, I think, strategic asset we have in the fund is being able to identify good science early,” Gold said. “I think we have the ability to see stuff coming before other people do. If we can continue to do that, the fund is going to be successful, both in creating companies and investing in new entities.”
Creating new companies will be an area of focus for Alpine BioVentures, Gold said. The idea is to follow the same model as Alpine Biosciences. The startup licensed a technology developed by the University of New Mexico and Sandia National Laboratories, a U.S. Department of Energy research arm, that uses what are called protocells to deliver different therapeutic agents—like small interfering RNA (siRNA) and messenger RNA (mRNA)—to cancer cells. Companies have struggled to effectively deliver these types of new therapies to the site of the disease, and Alpine Biosciences’ protocells might help.
One example, Gold said, might be using these protocells to deliver a siRNA drug like the ones being developed by Arrowhead Research (NASDAQ: ARWR), a Pasadena, CA-based company with R&D operations in Madison. Arrowhead’s stock plummeted last week after preliminary data from the company’s Phase 2a trial of its treatment for hepatitis B disappointed investors.
Gold said that venture capitalists and corporate investors were sniffing around Alpine Biosciences within a year of licensing the protocell technology, but the startup opted to sell to Oncothyreon rather than raise more money and build itself out. While it was a small sum, Gold effectively handed off the risk of developing the technology while retaining a stake that could pay off if it proves successful in the marketplace. “We wanted to be able to realize the upside for the protocells and not just take the cash,” Gold said.
Gold had been spending roughly half his time with Alpine Biosciences. Now, he’s working on two new startups through his fund. Both are focused on cancer, and one of them specifically on immunotherapy, he said. “We’ll probably keep those in stealth mode for a little bit,” he added.
Alpine BioVentures is looking at investments that are “kind of a version” of Dendreon’s sipuleucel-T, but that use new techniques and might be combined with immune-checkpoint inhibitors—new types of cancer immunotherapy drugs that remove cloaking mechanisms used by tumors—or other new therapeutic agents, Gold said.
One key thing Gold is keeping in mind is an “improved cost of goods” for developing such drugs, he said. “As we see more products coming to the marketplace that are going to be stacked on top of each other, cost is going to be more and more of an issue.”
That was certainly a concern with sipuleucel-T, which was aggressively priced at $93,000 per patient, about $30,000 more than analysts had projected. Dendreon made several other missteps that resulted in huge losses for some angry investors.
Looking back, Gold said Dendreon’s rise to winning FDA approval of sipuleucel-T showed what can happen when a startup is persistent and resilient in the face of plenty of challenges. But he also said he learned during the company’s subsequent fall the importance of being aware of the competition.
“If [sipuleucel-T] would’ve been approved after its [FDA] advisory panel in 2007, the prostate cancer marketplace was very different then,” Gold said. “It would’ve been a much different environment for us to launch a product than what we did having to wait a couple years. It created more noise in the marketplace.”
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