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Battelle Ventures Spins Out Hepregen with $5M in Funding to Develop 'Microliver' Tox Platform

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Battelle Ventures announced this week that it has spun out ADME/tox technology company Hepregen from the Massachusetts Institute of Technology, and has invested $5 million in a Series A funding round in the company.

The Medford, Mass.-based company will use the cash to continue developing its 2D microliver platform, which is designed to screen compounds for ADME/tox assessment and be used in drug discovery.

Last summer, the Medford, Mass.-based company received the first $3 million in funds from Battelle and its Tennessee affiliate, Innovation Valley Partners, with an additional $2 million available at the management's request.

According to a Battelle Ventures official, the VC shop is "constantly look[ing] for what we call a pain in the [drug-development] marketplace." In the case of Hepregen, that pain is ADME/tox testing and the frequent bottleneck it creates, said Mort Collins, a general partner at Battelle.

The company's technology is meant to unclog that blockage by allowing only the most promising drug candidates to continue in the drug development pipeline.

According to Collins, no method previously existed to assess ADME/tox, except to use hepatocytes, which begin dying almost immediately. "You cannot test problems associated with chronic use of drugs," an application for which the technology will be marketed, he said.

The firm's 2D microliver platform was developed in the lab of Sangeeta Bhatia, a professor of health sciences and technology, electrical engineering, and computer science at MIT; and by Salman Khetani, then a postdoc in her lab.

According to Khetani, who is also a co-founder of Hepregen and its director of research, the firm's "primary goal" is to "take primary hepatocytes, which otherwise die in conventional cultures and lose their liver-specific functions, and keep them highly functional and stable,"

Hepregen's microliver platform gives researchers a better way to assess ADME/tox, and "you have much more confidence in the data that you generate in the lab," said Collins. "This [technology] is a natural for us, because the payoff for [its] use, once it is validated, will be very high."

"It will shorten the drug-development process and make it less expensive," he said. Collins did not elaborate.

A Hepregen official said this week that the microliver technology improves clinical predictivity and generates higher-content data for the ADME/tox and drug-development markets.

According to Hepregen CEO and co-founder Bernadette "Bonnie" Fendrock, Hepregen will be in a pre-commercialization phase for 12 to 18 months, during which time it will be "working really closely with a handful of pharmaceutical companies to qualify and validate the platform."

That phase will involve generating data that the company hopes will become white papers, posters, or talks that will "help us as we drive toward commercialization," she said.

Fendrock added that within the next three years "our goal is to commercialize this platform, and take these initial collaborators and turn them into customers."

'Panicking' Cells

"Cells have all of this material inside of them, and they are sort of 'panicking,'" Khetani told CBA News. Introducing large doses of drugs into their environment significantly alters their molecular profile, a response that may or may not be predictive of what happens in vivo after exposure to lower doses of a drug for extended periods of time.

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If an in vitro cellular system maintains its functions at similar levels to those seen in vivo, and also survives for several weeks or potentially months, then researchers could start asking clinically relevant questions about drug toxicity, and metabolism or drug-drug interactions.

In addition, the use of hepatocytes in drug discovery is currently limited because the cells are unstable, prone to premature death, and are difficult to culture in a 96-well format.

If those limitations can be overcome, said Khetani, hepatocytes can start being more widely used in drug discovery, and "you might be able to develop a lot of interesting drugs."

Fendrock told CBA News this week that the firm's human microlivers are stable for four to six weeks in vitro, compared to several days for conventionally cultured hepatocytes. Hepregen's rat microlivers are stable for 10 to 12 weeks in vitro.

The system is also "amenable" to transgenic mice, and Hepregen has worked with monkey hepatocytes to reduce the use of live monkeys.

"Now we are further developing our system to be amenable to dog and guinea pig hepatocytes, some of the newer species that are becoming relevant to ADME/tox," Khetani said.

The platform has a "modular design; you can use hepatocytes from multiple species, you can include supportive stromal cells from multiple species," he added. "The suite of technologies that we have is compatible across different types of hepatocytes."

Hepregen's microlivers, which do not require specialized equipment or trained personnel, can also be modified to represent diseased livers, which could make them relevant for drug-discovery applications.

The basis for Hepregen's microliver platform was described in the November 2007 issue of Nature Biotechnology, which Khetani discussed with CBA News at the time.

Since that time, Fendrock and Khetani worked on obtaining funding for Hepregen. "Now we are trying to commercialize that particular platform — taking it out of MIT and into the marketplace," Khetani said.

Hepregen was incorporated in 2007 and closed its first round of VC funding in July 2008. The shop began operations two months later, and exclusively licensed a portfolio of 10 patents and patent applications from MIT.

Approximately four of the patents and applications relate to the 2D microliver platform that is the focus of the company's initial commercialization efforts, said Fendrock.

"Our plan is to drive this microliver platform toward commercialization," Fendrock said.

She added that the strategy is "to work closely" with potential customers "to validate and qualify this platform." In the case of Hepregen, its primary customers are pharmas, and potentially CROs.

Some partnerships would be funded collaborations, although the structure of the collaboration agreement will vary from partner to partner, Fendrock said. She said Hepregen is currently involved in partnerships, but declined to name the companies or disclose the terms of the alliance.

"We made the decision not to just package this platform up and sell it, but rather to explore the full capability of the platform," said Fendrock. "As such, we are interested in understanding the data that is generated, which will enable us to have a much stronger, more powerful marketing program as we talk to additional customers and additional partners."

Hepregen currently employs fewer than 10 people and is "building in the process-development and operations area," said Fendrock. The company also plans to build up its marketing and business development side, Fendrock said, without elaborating.

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"Our focus is on the customer, and really on figuring out how this platform can improve their success and [reduce costs] across the drug-development pipeline," said Fendrock.

"Beyond that, I think we have to ask, 'How do we leverage our microfabrication and tissue engineering capability, potentially beyond liver?' I do not have answers for you now, but obviously that is a critical strategic question for us to ask, probably beyond the next year or so."

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