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Spreading Its Wings, Fledgling UD Offshoot Orphagenix Opens First Office, Hires CEO

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Name: Eric Kmiec, professor, biology; director, applied genomics, Delaware Biotechnology Institute, University of Delaware; founder, chief scientific advisor, Orphagenix, Wilmington, Del.
 

 
University of Delaware spin-out Orphagenix last month announced that it had officially opened for business by establishing an office in Wilmington outside the walls of UD’s Delaware Biotechnology Institute, which had incubated the company since it was founded in 2005 by UD scientists Eric Kmiec and Hetal Parekh-Olmedo.
 
Oprhagenix is attempting to commercialize gene-repair technology, developed in Kmiec and Parekh-Olmedo’s lab, to treat rare, hereditary diseases such as sickle cell anemia and spinal muscular atrophy in which single-point mutations play a prominent role.
 
The company also recently named its president and CEO, Michael Herr, who along with Kmiec and Parekh-Olmedo is charged with further building Orphagenix’s management team, identifying strategic partners, and advancing the treatment method to clinical trials. Herr was previously director of science and technology at the University City Science Center, a Philadelphia-based incubator for early-stage life science and technology companies.
 
BTW caught up with Kmiec this week to discuss the origins of Orphagenix, the technology commercialization process at UD, and the difficulties in handing the reins of a company over to more experienced business executives.
 
Tell me about the development of Orphagenix’s core technology. At what point did you begin considering the commercial implications?
 
Our lab has been interested in the general process of DNA repair and genome rearrangement for many years. We’ve studied the mechanism under [National Institutes of Health funding] and other federal support for many years, and we continue to do that as basic scientists. I think there are a lot of interesting things on the basic science side that can still come through, so we continue to work on the hypothesis-driven science.
We discovered about 10 years ago that we could manipulate the sequence of genes by using short, synthetic DNA oligonucleotides. This actually was not originally our idea. Some early yeast geneticists had played around with this, but gave up on it for a variety of reasons. We picked it up in the mid-1990s with the idea of creating mutations or removing mutations in the coding regions of genes. It was really just based on our basic mechanistic studies of how DNA repair worked. The initial intention was just to study that, but we were able to maneuver the technique along. It had not escaped our attention that there are a number of human genetic diseases that are caused by point or single-base mutations – basically spelling errors in the coding region of the gene. Also, we were seeing this in our test systems and model systems … in yeast.
 
We started to play around a little bit with this approach in human cells. It was one of these situations where the stars began to align, and we attracted some biotechnology interest. I think part of the reason for that is that the field of gene therapy – which we’re scientifically distinct from – has been dominated by viral gene therapy, where people are delivering therapeutic genes or normal copies of genes using viruses. That has led to a great deal of promise, but not much delivery on those promises. What’s been frustrating about that field is that the people who are controlling the biotech and some of the federal funding were the people doing the work, so it was almost like they were funding each other. The amount of money that’s gone into that since the early 1990s [versus] the outcome has just been astonishing. The long-term outcomes of all of that viral gene therapy have generally not been particularly good.
 
We do not wish bad on our colleagues there at all. Any good press – anything that works – is a good sign for the entire field. But we have generally taken the non-viral approach, which is to move forward on these short, synthetic oligonucleotides, and we can deliver these directly into cells using a variety of methods.
 
You and the University of Delaware hold 14 patents related to this technology. Do these have more to do with specific delivery technologies, techniques, basic methods, et cetera?
 
We have rather broad-based platform technology patents, and I think as a company we are fairly confident that any commercialization of modifications using single-stranded DNA oligonucleotides will probably have to come through Orphagenix. The approach is basically to try and correct a gene. This is best viewed as kind of a spell check, so if the gene is a word, and the word is spelled wrong, then that particular letter has to be changed, and we have a way of changing it. Hetal [Parekh-Olmedo] and I have run this lab and spent probably eight to 10 years making sure we understand the mechanism and the reaction by which these synthetic molecules work. When we formed Orphagenix, Hetal and I believed that the most critical choice, believe it or not, was not the science or whether or not the oligo actually works; rather, it was the choice of the targeted disease. There are so many things about genetic diseases that go beyond just the basic spell check. I think that we were clearly one of the first in this area, and we’re kind of like Monday-morning quarterbacks – we get too much credit and too much blame whether we win or lose. We get a little bit more credit than we deserve for keeping this idea out there. But I will say that I am very proud of the way that we’ve done it in forging ahead with understanding how this works.
 
Now we come to the application side. We started the company in 2005 basically to begin to capture all the patents we were filing. If [the patents are] just inside a university, they can be broken apart and changed. We felt that we had two decisions. One was to license this out to a couple of companies. There was some interest, but at that time people were a bit more excited about vaccines and other technologies. And again, we were driving forward on the basic science side, so we were not out there shopping this. The University of Delaware kind of accumulated all of these [patents], and we felt the best way to move this forward was to basically start a virtual company, which we did in 2005. But we have day jobs, so a couple of people who knew about what we were doing started to do some matchmaking. And after sifting through a bunch of possibilities, we ended up with Michael Herr as CEO. We like him a lot and have a lot of faith in him, and he’s beginning to assemble a very good team to commercialize this. The biggest challenge in the last six months has been the choice of target. You have to take into consideration a lot of things that go way beyond the basic science side. When we started this, one of the things that Hetal and I came to clearly understand – and most inventors don’t, in my experience – is that our skill set will get less and less important to this company. That’s what we want, because it’s a sign that smarter people than us are going to take us forward and start to address important questions about commercialization.
 
Is this why you chose not to take an executive position with the company? As it stands now, you have taken on an advisory role, correct?
 
Right. For the most part, universities tend to frown upon [faculty taking executive positions], although it can be negotiated. Hetal and I both felt, though, that you want to increase credibility, particularly in a field such as molecular medicine. There is not a lot of credibility out there for DNA-based stuff. We thought that if this is as good and holds as much promise as we believe it does, then other people ought to be able to come around the idea and turn it into a product. That’s what we want. We will continue the science and mechanistic studies, because that adds to the value of the approach. We have never developed a drug, never taken it through that process. You’ve got to be able to put your ego aside and believe that people who have done this before can do it capably.
 
Here’s the problem: There are very few people who have done the gene therapy side. There are plenty of people we’ve talked with that have taken hundreds of drugs through the clinic. I think I met more than 50 people who claim to have invented Viagra. Those kinds of folks we tend to turn off a little bit. The consultants, and there are many of them, are people who have been through these gene therapy wars, and understand that using DNA as medicine is quite different from using a drug. And in some ways, it’s easier. The search to find the right disease targets and the right people has occupied our time for the last 18 months. We’re confident now that we’ve found a good team, though.
 
That process of letting others begin to take things over must be difficult. Did that process start with the technology transfer office at the University of Delaware? Can you talk about that process?
 
The University of Delaware’s tech-transfer office is in the growth and maturation phase. It was not very difficult to get them to go along with the Orphagenix idea. In fact, I wish they would have protected us a little bit more, because we’re heavily conflicted here in that we, as the inventors, benefit financially from some inventions that flow through the university. But they were very anxious to get this done. At the end of the day, if you just put your financial cap on, we decided to step back and not get involved in that negotiation, but I think that the tech-transfer office was probably not as aggressive as we would have liked them to have been. The transition from the bench to the company was very easy, and probably a bit too easy. In the end we benefit from that, but it maybe could have been a little better. It’s to Michael Herr’s credit and to the people on the business side to have gotten a very good deal from the university. We all hope to win in the end, so there is no blame or anger here – it’s just sometimes that you wish they were a bit stronger than they were.
 
Do you think this is because it was one of the first big possible biotech deals to come out of the University of Delaware in terms of tech transfer?
 
I think you have the right impression. President [David] Roselle, the current president, has been terrific and a big fan of ours, but I think he’s trying to change the direction a little bit to encourage more entrepreneurial stuff. Their experience is limited, and this particular company was one of the first that they’ve done, so it became a bit of a learning experience. This is not to paint them in a bad light. If you go to the MIT, Harvard, Penn, or Thomas Jefferson University tech-transfer offices, these guys are real experts at this, and they’ll cut a better deal for the inventors. But in the end, if you’re the founder of a company, you just want this to happen. You want it to be good news for the company and have it get an advantageous deal, because then the investment money goes farther. We had to step back and watch this unfold. I think that Orhpagenix got an excellent deal from the university, and in the end, if this all works out, we’ll all be happily drinking Champagne.
 
The company was housed for a short while in a University of Delaware incubator. Is this a fairly new operation at the university?
 
Actually, we were at the Delaware Biotechnology Institute. It’s an academic building, and the company was technically just in our lab. The incubator and the lab were synonymous. Orphagenix isn’t paying any rent. Michael’s been the only employee, and he has his office not too far from here. But the company itself is kind of based in the lab, and we do not get any funding from Orphagenix, so we try to avoid that conflict. The building itself isn’t technically an incubator.
 
But now Orphagenix has relocated beyond the walls of the institute?
 
Only the office. All of the lab stuff that goes on to support the science still goes on in the lab.
 
Going forward, are you and Hetal retaining a scientific advisory role?
 
Yes, that is something we’ll stay on, we hope, for as long as the company is around.
 
Is Orphagenix getting first dibs on inventions coming out of your lab now?
 
Right, there is an exclusive license for Orphagenix to commercialize these discoveries.
 
In this advisory role, do you think you will be able to shape where this technology is going? As you’ve said, you had to relinquish some control.
 
We have two roles. The first is to push the science forward, and provide these people making clinical-based decisions as much information as we can about the technology. Our job remains to advance the science. The second role is to really provide a reality check on people who sometimes feel that deliverables are very fast. We have the luxury of being supported by external funding that Orphagenix does not supply – federal, state, and foundation money. Part of our job is to help people understand exactly where the technology is, and also where the field is. This is something that is often forgotten, that there are other people and other technologies moving forward, so our job is to maintain a scientific review of them and how they relate to our patents and approaches.

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