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In Upstate New York, a Local Pharma’s Early Success May Put Industry on Investors’ Map

The biotech industry in Buffalo, NY, is poised to get a shot in the arm after a local drug maker has moved into the clinic a drug candidate developed using a technology platform licensed from the University of Buffalo, according to a company official.
The drug candidate, an anti-cancer compound developed by UB spinout Kinex Pharmaceuticals, may be the first small molecule developed in the region to have advanced to human trials, a milestone that could stimulate further growth in the regional biosciences industry by attracting larger biotechnology companies and investors, officials said.
Kinex Pharmaceuticals last week said that it has entered the drug, KX2-391, into Phase I clinical trials and that it has begun seeking corporate or venture capital partners to move the drug farther downstream and develop additional candidates. The development could also bode well for UB in the form of additional licensing payments.
“For us, getting our first win on the therapeutic end that truly, fully came out of UB is huge,” according to Marnie LaVigne, director of business development at the UB New York State Center of Excellence in Bioinformatics and Life Sciences, where Kinex is currently headquartered.
Though KX2-391 still has a long road ahead of it, the drug is believed to be the first Phase 1-approved small-molecule drug developed at UB and nurtured by the UB Center for Advanced Biomedical and Bioengineering Technology, or UB CAT, according to officials from the university and Kinex.
UB CAT is one of 15 Center for Advanced Technology sites at New York State universities that receive annual funding from the New York State Foundation for Science, Technology, and Innovation, also known as NYSTAR, in an attempt to spur academic-industry collaborations in specific regions of New York. Like Kinex, the UB CAT program is physically located in the UB Center of Excellence in Bioinformatics and Life Sciences.
“What is so critical to this particular project is that it did come out of UB, and [Kinex was] actually able to see some economic impact [from the state] in that early drug-development phase, when most often [the technology] is licensed right out of the area,” said LaVigne.
She added that NYSTAR offers several funding programs in addition to the Centers for Advanced Technology program, but it doesn’t often fund drug-discovery and -development projects because of the long timeframe involved.
But while NYSTAR has fostered early biomedical success stories in the past, including medical device company SmartPill – which last year received 510(k) release from the US Food and Drug Administration for the sale and use of its ingestible gastrointestinal monitoring system – a pharma breakthrough, especially in the oncology field, is more likely to attract other life sciences companies and investors to the area because of its market potential.
KX2-391 is a highly selective kinase inhibitor that has been efficacious in pre-clinical animal models of colon, pancreatic, prostate, and breast cancer, according to Kinex.
In the Phase I trial, which is currently underway at nearby Roswell Park Cancer Institute and MD Anderson Cancer Center in Houston, Kinex is evaluating the safety, tolerability, and pharmacokinetics of KX2-391 in patients with various advanced malignancies that have not responded to other conventional therapies.
“The drug is designed for oncology applications,” said David Hangauer, an associate professor of chemistry at UB and senior vice president of research and development at Kinex. “Right now it could be for solid tumors and/or liquid tumors. In pre-clinical studies it works on either, so we haven’t restricted its [use] for either.”
Kinex scientists discovered the drug using a platform technology that designs and synthesizes small-molecule, substrate-competitive kinase inhibitors. Hangauer developed the method, which the company calls Mimetica, while at UB.
Kinex spun out from UB in late 2003 and licensed from the university three core patent filings related to the kinase inhibitor discovery method, all of which are still under review by the US Patent and Trademark Office. Since then, Kinex has filed for several additional patents on its own.

“The goal for us is that we don’t want to tie their hands in terms of getting funding. We want to make ourselves more valuable as [a source] for their intellectual capital. That’s what keeps life sciences rooted in one area.”

Hangauer said that when the company was founded he never considered licensing the discovery technology to an existing entity “because this technology really requires expert usage. And because I was the one who developed it with my students, I was in the best position to commercialize it.
“I couldn’t just turn over the keys to somebody,” he added. “It couldn’t have happened any other way than the way we did it.”
Because it does not hold patents related to the specific composition of KX2-391, UB will not receive traditional milestone payments as the drug advances through clinical trials, or royalty payments on future sales of the product, Kinex said. The university does, however, stand to receive ongoing licensing payments related to the discovery method, which Kinex plans to use to develop additional compounds that are currently in the pre-clinical testing phase.
The potential financial upshot for UB is unclear. Kinex, which is privately owned, declined to provide financial details of its licensing agreement with the school due to traditional non-disclosure agreements. Representatives for UB’s Office of Science, Technology Transfer, and Economic Outreach, which handles technology licensing for the school, were unavailable for comment.
According to UB, the version of the drug to be used in clinical trials was synthesized by contract research organization Albany Molecular Research, also located in the state, but the final dosage form was prepared in the UB Center of Excellence, where Kinex has been headquartered since it was founded.
Kinex has also received funding over the past few years from UB CAT – LaVigne estimates six figures of financial support over the past two years – which the company has had to match as part of its obligation to the program. In addition, Kinex has had access to the clean room facilities at UB CAT, which LaVigne estimates has saved the company approximately $250,000.
“That’s really the purpose of the program – it’s not simply a funding vehicle, but it is a vehicle [with] R&D resources that can be tapped into,” LaVigne said.
Lyn Dyster, Kinex’s vice president for operations, agreed that access to the UB CAT facilities has been invaluable, although it does not act as a traditional incubator, per se.
“The building is owned by the university, and eventually it will be occupied by academics, but there was an opportunity to have Kinex grow up a little bit more inside the facility before we move out,” Dyster told BTW.
“We’ve been able to package our unit dose bottles of the drug on-site instead of subcontracting that out to someone else,” she added. “It’s a significant savings because we could use the facilities here to do some of that work, on an as-needed basis. We needed it for a period of time, we used it, and now we’re done.”
As Kinex begins to attain self-sufficiency, there is the possibility that it could move out of the Buffalo area, which would erase any impact the company has made thus far on the development of the biosciences industry in the region.
“I would guess that as you start getting into larger amounts of money – since at the moment we are not in seven figures of support yet – this could be an issue,” LaVigne said. “The CAT program does not currently have a stipulation” that companies stay in the region, she said.
“It is a danger,” LaVigne added. “The goal for us is that we don’t want to tie their hands in terms of getting funding. We want to make ourselves more valuable as [a source] for their intellectual capital. That’s what keeps life sciences rooted in one area.”
The company has not disclosed its plans for life outside of the UB CAT, though Hangauer said he is committed to growing the company and retaining his professorship at UB.
He added that that the company is currently in negotiations with several large pharmaceutical or biotechnology companies to help move KX2-391 farther downstream. Another funding option is venture capital, Hangauer said. “Either one would help move the compound forward through clinical trials,” he added.

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