D&D Pharmatech propelled itself to the front ranks of privately held biotech firms by raising $137 million in a series B round to develop new therapies for Parkinson’s disease and fibrosis, as well as a series of imaging biomarkers for neurodegenerative disease and cancer.
The company is part of a nascent biotech hub in the Baltimore region, based around the longstanding biomedical research strength of Johns Hopkins University. Other recent Johns Hopkins spinouts include liquid biopsy firms Thrive Earlier Detection, which closed a $110 million A round in May, and Personal Genome Diagnostics, a genome analysis company, which raised $75 million in a B round last year. Although the university invariably tops the US National Institutes of Health’s research funding league, it has historically lagged its peer institutions in terms of commercial biotech spin-outs. “It just really wasn’t a focus of the institution before,” says Christy Wyskiel, head of Johns Hopkins Technology Ventures, the university’s research commercialization arm. But an explicit strategy put in place five years ago to boost the biotech innovation ecosystem is now starting to bear fruit.
D&D is organized as a holding company, with research personnel in the United States and Korea, and three operating subsidiaries: Neuraly, which is developing therapies for neurodegenerative conditions; Theraly Fibrosis, which is focused on drugs for fibrosis; and Precision Molecular Inc. (PMI), which is developing diagnostic imaging tools for neuroinflammation and cancer based on positron-emission tomography (PET).
The common thread linking all of D&D’s activities is its chairman Seulki Lee, an associate professor in the department of radiology and radiological science at Johns Hopkins. Lee had originally established a family-owned venture, also called D&D Pharmatech, with his father Kang Choon Lee of SungKyunKwan University in Seoul, before moving to the United States for a postdoctoral post at Stanford. He then received research funding under the National Institutes of Health’s Pathway to Independence program for early-career researchers and brought this grant to Johns Hopkins. After initial mentoring from Martin Pomper, professor of radiology and radiological science, he gained an academic post. “He has been spectacularly successful, both scientifically and entrepreneurially,” says Pomper. Some of the molecules now in development originated in Korea, but the specific indications they are targeting have been informed by science conducted at Johns Hopkins.
For example, at Neuraly, the lead program involves repurposing glucagon-like peptide 1 receptor (GLP1R) agonists, a drug class long established in type 2 diabetes, as anti-inflammatory drugs with potentially neuroprotective effects in Parkinson’s disease. “Initially we tried to develop them in diabetes, but it was a pretty crowded field,” says Lee. The neuroprotective effect of GLP1R agonists had been recognized in animal models for over a decade, and a UK group led by Tom Foltynie, professor of neurology at University College London, published data from a phase 2 trial of the GLP1R agonist exenatide in Parkinson’s disease two years ago. He is now gearing up for a phase 3 trial.
Preclinical data from Johns Hopkins researchers uncovered a likely mechanism underlying the observed effects. An earlier collaboration with the late Ben Barres, of Stanford University, had established that microglia, which ordinarily have a phagocytic role in the central nervous system, can also, upon activation, induce a neurotoxic phenotype in astrocytes by secreting the pro-inflammatory cytokines interleukin-1α and tumor necrosis factor, as well as complement component 1q. A group led by Neuraly’s scientific founder Ted Dawson, professor of neurodegenerative diseases at Johns Hopkins, along with Seulki Lee and Han Seok Ko, also of Johns Hopkins, subsequently reported that Neuraly’s lead compound NLY01, a long-acting PEGylated GLP1R agonist, blocks this effect. Foltynie describes the finding as “compelling.”
The mechanism’s significance could extend beyond Parkinson’s disease, as the pathogenic astrocytes—known as A1 reactive astrocytes—are also observed in post-mortem studies in the brains of patients who had Alzheimer’s disease, Huntington’s disease, amyotrophic lateral sclerosis or multiple sclerosis.
So far, at least in Parkinson’s disease, it is not clear whether the effect is large enough to have a clinically meaningful impact on the course of the disease.
When Foltynie and colleagues scored patients’ motor functions using the Unified Parkinson’s Disease Rating Scale (UPDRS), the difference was not huge: 3.5 points between the drug treatment and placebo groups after 48 weeks of therapy. “The question comes down to: is that all you can get with a GLP-1 receptor agonist?” says Foltynie. An extended treatment period could improve the outcome. “If it’s a cumulative effect, then 3.5 points per year over ten years is the difference between success and failure,” he says.
Neuraly, which is about to embark on a phase 2 trial, is taking a similar though subtly different approach. It is betting that its PEGylated molecule will have better activity, on the basis of superior brain penetration and prolonged activation of its target receptor. “Non-modified exenatide will rapidly desensitize GLP-1 receptor signalling,” says Dawson. “In culture we showed that NYL-01 does not desensitize the GLP-1 receptor—it continues to signal.”
Theraly is taking an apoptosis-inducing mechanism—TRAIL signaling, originally explored in cancer—into fibrosis. Work in mice had shown that receptor agonists to TRAIL, which stands for tumor necrosis factor–related apoptosis-inducing ligand, mediates apoptosis in cancer cells without causing toxicity. With the notable exception of AbbVie, which has a second-generation TRAIL receptor agonist, ABBV-621, in phase 1 trials, experimental TRAIL agonists in cancer have been largely abandoned. “None of the drugs went beyond phase 2,” says D&D cofounder and chief scientific officer Viktor Roschke. In clinical trials, problems with tumor resistance emerged, possibly as a result of TRAIL signalling through a third receptor, TRAIL-R4, which induces expression of NF-κB, a pro-inflammatory transcription factor that has several tumorigenic effects. Other mechanisms may also be involved in blocking apoptosis. “Cancer cells are so heterogeneous,” says Gregory Gores, professor of physiology and medicine, and executive dean for research, at the Mayo Clinic in Rochester, Minnesota. “There are lots of ways to stop the signal cascade.”
In fibrosis, this is not an issue because fibroblasts, the collagen-producing cells that drive the process, are genetically stable, unlike cancer cells. “Genetically, they should be normal, and they’re primed for cell death because they’re activated,” he says. Gores is not involved in Theraly, but his in vitro findings form the theoretical basis of the company’s fibrosis program. His work, published in 2003, suggests that TRAIL-mediated apoptosis in activated hepatic stellate cells (precursors of myofibroblasts, the main cellular culprit in liver fibrosis) can help to resolve fibrosis.
Lee and colleagues later confirmed that a long-acting TRAIL ligand causes apoptosis of the same type of cells in a rat model of liver fibrosis. “What you’re doing with TRAIL is you’re giving them a hard kick down the [cell-death] pathway,” says Gores. Lee’s group has extended these observations into several other forms of fibrosis, suggesting that TRAIL activation may be a master regulator of fibrosis.
Replicating these effects in clinical settings will be challenging, however. “I don’t think this is a simple receptor to ligate or activate,” says Gores. “This isn’t in the literature, but a lot of companies have [TRAIL-targeting] preparations that were liver-toxic.” Theraly’s lead molecule TLY012 is PEGylated, to offset the short half-life of the native molecule, and engineered so that it trimerizes, which is required for receptor activation. Its manufacture has been challenging, Roschke says. The company’s production process is feasible in terms of yields, but it is still working on a downstream purification process, given that the protein is not soluble. “We plan to file an IND [Investigational New Drug application] in the next year or so,” Lee says.
D&D’s third subsidiary, PMI, is developing biomarkers that will guide patient selection onto clinical trials and monitor patient responses to therapy. “PMI was conceived to support the other endeavors,” Pomper, its scientific founder, says. It has additional activities in cancer. Although not all of its programs are in the public domain as yet, among those confirmed are PET-based biomarkers targeting macrophage colony-stimulating factor 1 receptor (CSF1R) and soluble expoxide hydrolase (SEH) to track microglial activity and Parkinson-associated inflammation, respectively.
CSF1R offers a non-invasive but specific method for monitoring neuroinflammation, as, within the brain, the receptor’s expression is largely confined to microglia, the key mediators of the process. “It certainly seems to be very specific in preclinical models of inflammation,” Pomper says. SEH, which controls fatty acid metabolism, has long been pursued as a target for neuropathic and inflammatory pain. A recent study led by Kenji Hashimoto, of Chiba University in Chiba, Japan, and Bruce Hammock, of the University of California, Davis, implicates the enzyme in both the initiation and progression of the inflammatory processes associated with Parkinson’s disease. At PMI, each of these biomarkers is undergoing or is about to enter clinical studies, says Pomper.
D&D’s ambitions extend beyond its first three subsidiaries. “Depending on our fundraising abilities, there will be more,” says Nina Urban, vice president innovation and R&D alliance at D&D. A fourth company, which will bring big-data analytics to bear on neurodegenerative disease, is in the process of being finalized; a fifth, involving a clinical-stage drug asset, is at an earlier stage of preparation. These new initiatives also have Johns Hopkins involvement, although they involve additional institutional partners as well.
D&D exemplifies the increased venture capital flow to firms in the Baltimore region. Johns Hopkins spinouts are now raising about $500 million in aggregate every year, Wyskiel says, which represents a tenfold increase in the past five years. Although Baltimore still lags more developed biotech hubs, such as Cambridge, Massachusetts, the dramatic rise of Philadelphia as a leading center for regenerative medicine on the back of its strengths in gene therapy and chimeric antigen receptor (CAR)-T cell therapy points the way toward a possible future for Baltimore. “We recognize what ‘good’ looks like in other regions,” says Wyskiel.