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MolecularMD Adds Two New Clients to Bolster Role as OHSU Tech-Transfer Success Story

Brian Druker, professor of medicine, Oregon Health and Science University; director, OHSU Center for Hematologic Malignancies
Arundeep Pradhan, director of technology and research collaborations, OHSU

MolecularMD, based in Portland, Ore., is one of the most recent spinout biotechnology companies from Portland’s Oregon Health and Science University. Founded last June, MolecularMD is developing a battery of assays to help match specific patients with tailored cancer therapies and to monitor the progress of their disease.
The company’s initial focus is on molecular testing of chronic myeloid leukemia, but the firm is evolving into other disease areas such as acute myelogenous leukemia, glioma, and lung cancer.
Earlier this month, OHSU and MolecularMD announced that MolecularMD had signed contracts for its services with a pair of large pharmaceutical companies, adding to a growing list of pharma and biotech clients and generating revenues that are expected to drive MolecularMD to profitability by the end of the year.
Last week, BTW caught up with Brian Druker, the company’s scientific co-founder, and Arundeep Pradhan, director of OHSU’s tech-transfer operations, to discuss MolecularMD’s potential impact on cancer patients and on the biotechnology community in the greater Portland area.
Brian, tell me about the scientific basis on which MolecularMD was founded.
BD: My clinic consists predominantly of patients with chronic myelogenous leukemia. We have a very effective therapy for that – Gleevec – that I helped develop. The treatment is extremely effective, with a 95-percent, five-year survival rate. But if you do PCR for a transcript present specifically in leukemia cells, you can still detect leukemia in most of our patients. The problem has been that it’s much like HIV monitoring 10 or 15 years ago, where everyone wanted to monitor HIV mRNA levels. Everybody had their own homebrew – there was no standardization. If you went from one lab to another lab, the numbers you got were different, and you didn’t know if you were better, worse, or the same.
That’s exactly where we are with monitoring patients with CML on … Gleevec. Everybody has their own homebrew; there is no standardization. I follow patients from all around the country, and unless they come here to the university to have their testing done, I don’t know if they’re better, worse, or the same.
We decided to set up a laboratory that would offer standardized testing with rapid turnaround, and could begin to provide kits like Roche did with HIV mRNA detection, so we could actually get standardized testing. That way, people could go anywhere in the world to have their CML monitored accurately and reliably. That was the impetus for setting up a company, but there are many other cancer drugs being developed that require certain molecular features for study enrollment, and we’re developing tests with a number of pharmaceutical companies to help guide enrollment decisions and which patients would be eligible for a specific drug. So it’s moving more towards personalized medicine and thinking about how we monitor the effects of those drugs using molecular testing. That’s how we got started, and that’s what our goals are as a company.
Are there specific biomarkers associated with CML that you discovered and MolecularMD is licensing back from OHSU?
BD: We’ve also discovered specific Gleevec-resistant mutations, and [MolecularMD] has licensed that IP back from OHSU. So if a patient becomes resistant to therapy, we can monitor for those mutations.
Did MolecularMD license specific IP to begin the company?
AP: We’ve filed for patent protection on some of these mutations related to CML, and Brian is a co-inventor on that with others from OHSU.
Can you disclose what the patent numbers or patent application numbers are?
AP: The patent applications haven’t been published yet.
The company was founded last year, around June, and already expects to be profitable, correct?
AP: Yes, we’re expected to be in the black for 2007.
Why do you think [this is the case]?
BD: There are a couple of reasons. First of all, we’ve been able to land some very large contracts from pharmaceutical companies that are running clinical trials in patients with chronic myeloid leukemia. I can leverage my expertise and relations with the pharmaceutical industry to show them that we not only understand what their needs are, but we can supply them with an assay that’s better than anything else out there. That’s what I care about. I spend one day a week in the clinic, and I need to be able to [give] my patients accurate and reliable results. We have worked incredibly hard on making sure the tests are sensitive enough, fast enough, and reliable enough so that when I go to a pharmaceutical company and talk about MolecularMD running assays for them, I know we have the best in the industry.
Have any of those pharmaceutical contracts been disclosed yet?
BD: I would have to refer you to Stephane Wong, our chief operating officer, about that. Two of the contracts are with top-10 pharmas – one in the US and one in Europe. The others are smaller contracts with biotech companies. [Following this interview, Wong wrote in an e-mail to BTW that the contracts can not be disclosed due to confidentiality agreements -— Ed.].
Sheridan Snyder, chairman, president, and CEO of investment and early-stage management firm BioCatalyst, is the sole investor in the company. How did he and BioCatalyst come into the picture?
BD: Sheridan Snyder and I go back almost 20 years. I generated an antibody when I was at Dana-Farber [Cancer Institute] in Boston, which we licensed to Upstate Biotechnology. It was and is still their number-one best seller. After Sheridan sold Upstate a few years back, he set up BioCatalyst to be an incubator company for new biotech ideas and corporations. He came out to Portland and visited, and asked about what ideas we might have. I pitched the idea of this need we might have, and how we could leverage that to a larger field of molecular diagnostics in cancer. He and his group did their due diligence, and realized what a huge market opportunity this potentially could be, and he became the investor. Stephane Wong was identified as the person that worked with him at BioCatalyst that would come out to Portland and help us set this up.
Have you retained a role with the company?
BD: As a scientific founder, I also have a consulting contract, and because the labs are here in Portland, I spend about an hour a week just reviewing data, scientific progress, and setting some of the strategic plans and goals.
Arun, can you give me an idea of the deal from OHSU’s perspective? Is this similar to other tech-transfer deals you’ve done? Is this potentially lucrative for OHSU?
AP: The deal is fairly typical of the deals we do with startup companies. In terms of it being lucrative, the way we looked at it was that because the company is focused on diagnostics, there was a great potential to generate revenue early on. We kind of worked with the company to ensure that whatever deal we put into place would take that into account.
As far as OHSU is concerned, it’s actually addressing a need that had not existed in the market before. From our perspective, having a company like MolecularMD in the market – both from the perspective of offering a test, and also soon becoming, I think, one of the premier biotech companies in the Portland region – is definitely highly appealing.
How many other spinouts has OHSU spawned?
AP: We do about three to six spinouts per year. Last year it was three, the year before it was six. Of the spinout companies we’ve created in the last 15 years or so, about 20 of them are still around. We’ve had a couple of our spinout companies go [public] in the last two years. From that perspective, spinning off companies has been a successful venture for us.
How many of these companies have stayed in the Portland region?
AP: Not as many as we would have liked. But I think that the recent trend, over the last three years, is that they tend to stay local. There are obvious advantages in being in close proximity to the faculty that developed the technology. I think that’s one of the top reasons that MolecularMD is located here. If they were farther away, it would not be as easy for Brian and others to work with them either on the consulting services they provide, or vice versa. If you take a look at startup companies in general, 80 percent tend to stay in the vicinity, and 20 percent are mobile. That’s generally been the case for us recently.
BD: Clearly OHSU wants to have associations with spinout companies. That’s good not only for its reputation, but also from the perspective of having profitable biotech companies that contribute to their revenue stream. In addition, for the Portland area to have a profitable biotech company that was born and raised and grows here, that’s good for the business community here. Our plan is to continue to build and grow here, and build a successful model of biotech in Portland in the hopes that we can attract even more biotech. In particular, if you look across the West coast – Seattle, San Diego, and San Francisco – where the big biotech markets have been, if you compare the cost of living in those cities to Portland, Portland wins. The reality is that if we can begin to show that Portland has the ability to have this entrepreneurial spirit and can sustain successful biotech companies, some of the workers at biotech companies on the West coast that like being on the West coast will see that there are actually opportunities in Portland, and that it could become the next place for biotech on the West coast.
Is there incubator space for the company?
BD: We do have a small incubator space that is affiliated with OHSU and Molecular MD, along with a number of our other companies. The challenge, of course, is that you get a company to the point where it’s outgrowing its space and needs to move. We’re in that next phase of development in trying to find additional space that is close to OHSU. In an urban setting, that’s not always easy to do.
BD: The nice thing for us is that the space was already there, ready to move in. We’ve expanded pretty rapidly, and every time we’ve needed to do that, there has been some space available to us. Having access to that kind of incubator space has made it that much easier for us, because it’s close to our campus – a 10-minute walk and five-minute drive.