Life Biosystems, a Basel, Switzerland-based “in silico-discovery” startup, this week said that it has signed a wide-ranging 10-year collaborative research partnership with MD Anderson Cancer Center.
Life Biosystems officials said the agreement is key to the company’s business strategy because it provides clinical data that will drive its discovery efforts, as well as access to research partners at the institute that can help validate the company’s discoveries.
The deal encompasses a broad swathe of research projects in the molecular medicine arena, including discovering and developing biomarkers, drug targets, and combinatorial therapies; as well as identifying alternative indications for existing drugs, stratifying patient for clinical trials; and predicting adverse drug reactions.
The agreement gives Life Biosystems permission to partner with MD Anderson researchers on projects of mutual interest without further negotiation of terms, and gives the company the option to exclusively license intellectual property that arises from the collaboration.
“We are a company focusing on in silico discovery … so we don’t do any experiments or any clinical trials ourselves, and that’s why we need a very strong partner network, and that’s where MD Anderson comes in,” Life Biosystems CEO Stephan Brock told BioInform this week.
Brock, like much of Life’s management and staff, is no stranger to using computational approaches in drug and biomarker discovery; the company is in many ways a reunion for former Lion Bioscience employees: Lion’s founder and CEO Friedrich von Bohlen founded Life around two and a half years ago and he serves as president of the company’s board.
Brock, meantime, led a group at Lion that was developing methods for integrating discovery and clinical data within pharmaceutical firms; while David Jackson, director of in silico discovery at Life, was previously head of target discovery at Lion. A number of the firm’s 16 researchers are also “ex-Lions,” Brock said.
But Life is in no way a reincarnation of Lion, a company that ultimately came to symbolize the frustrations of the commercial bioinformatics software model. Lion was one of several bioinformatics firms to raise millions of dollars in the industry’s short-lived “boom” in 2000, but like many of its peers in the industry it had difficulty generating enough software revenues to stay afloat. Lion pulled in more than $200 million in its IPO but ultimately sold its bioinformatics business to BioWisdom in 2006 for $5 million.
"We're not a bioinformatics software product company,” Brock said. “Our focus lies in the clinical need, such as poor drug response rates or the need for optimized trial design,” he said, noting that "when it comes to bioinformatics tools, there is no point in re-inventing the wheel. We rather seek to innovatively contextualize and integrate their individual strengths.”
Life believes that the experience of its researchers, coupled with partnerships with clinical centers like MD Anderson, will enable it to derive insights from molecular and clinical and business data that will ultimately result in valuable intellectual property, such as novel combinatorial therapies or alternative medical uses.
Von Bohlen agreed. "It's not about which tools you use," he said. "You need to know how to use and combine them with regard to a particular question, and whether the data you use is relevant. That is what [Life's researchers] do and where their particular strength lies."
“We are a company focusing on in silico discovery … so we don’t do any experiments or any clinical trials ourselves, and that’s why we need a very strong partner network, and that’s where MD Anderson comes in.”
In addition to its in-house expertise, the company is counting on its relationship with MD Anderson — and eventually other cancer centers — to help give it an edge in the competitive drug-discovery market.
Indeed, the company is not alone in its informatics-based approach to discovery. Compugen, for example, another bioinformatics company from the IPO class of 2000, has modified its business model in recent years to focus entirely on internal drug and biomarker discovery. Likewise, companies that originally launched under the “systems biology” label, like Genstruct and BG Medicine, rely heavily on in-house computational teams to drive their discovery efforts.
Even traditional bioinformatics software companies are setting their sights on discovery. Biobase, for example, is collaborating with the Windber Research Institute on breast cancer biomarker discovery and plans to enter similar collaborations with other partners going forward [BioInform 04-11-08].
Both Brock and von Bohlen acknowledged the competition. “I don’t want to say that Life is the only company who can do this, but from the people in the company, the experience with MD Anderson, and the last two and a half years in the market, I think it’s well positioned to play an important role in the emerging contribution of molecular diagnostics and the health economy to the drug development process,” von Bohlen said.
An Evolving Model
The 10-year agreement that Life signed with MD Anderson is actually a modified version of a contract the parties signed several years ago, under which Life was hired to integrate clinical and molecular data in an effort to advance translational research at the institute.
However, Brock said, the relationship soon “evolved” into a two-pronged approach that eventually shaped the company’s business model. On the clinical side, Life began a consulting project to help determine MD Anderson’s requirements for replacing its clinical trial protocol data-management system. On the discovery side, Life began developing its own in silico discovery capabilities in order to make use of the clinical information at its fingertips with the ultimate goal of creating new IP.
These two projects are now embodied by the firm’s two business groups: its Clinical and Research IT consulting business, based in Houston, Texas; and its In Silico Discovery business, based in Heidelberg, Germany. Brock said that the company currently employs around eight staffers at each location and that it expects to double the Heidelberg research staff by the end of the year.
The Clinical and Research IT group recently wrapped up an 18-month review of MD Anderson’s requirements and available options and is now managing the implementation of a new “comprehensive protocol management solution” that it has recommended to replace the center’s existing system.
Maurie Markman, vice president of clinical research for MD Anderson, told BioInform that the company “provided some very valuable consulting expertise as we move forward in some of our development projects related to our clinical research infrastructure."
Financial terms of the agreement weren’t provided, but Brock said that the firm’s clinical IT consulting business is generating revenues to support the company’s longer-term plans in discovery.
The company has also raised an undisclosed amount of private financing recently. Dievini, a firm von Bohlen co-founded in 2005 to manage the life science investments of SAP founder Dietmar Hopp, is its primary investor.
“Of course [Hopp] wants to see a return on his investment, but he follows a long-term strategy,” Brock said.
The “upside potential” for the company, Brock said, is in building a portfolio of novel IP that its in silico discovery group develops internally or through partnerships with research groups at centers like MD Anderson or biotech and pharmaceutical firms.
The firm plans to build this IP in a number of “clinically relevant” areas related to addressing poor response rates, rationally predicting combinatorial therapies, expanding the market for existing drugs by identifying alternative medical uses, and optimizing clinical trials based on molecular characteristics of patient cohorts.
Brock said that the company has some initial “case studies” that it has prepared as initial proof-of-concept examples of its approach. In one example, he said that the company used relevant clinical and publicly available data to identify a potential novel receptor that appears to be responsible for adverse events that some patients experience with erythropoieisis-stimulating agents. The company is now “refining” the therapeutic and diagnostic implications of this finding, he said.
Life and MD Anderson are just starting their first validation project for one such proof-of-concept study, and will soon begin their first preclinical testing project for another study, Brock said, though he declined to provide further details. He said the company is also beginning clinical validation with an undisclosed cancer research group in Germany for another finding, and has “entered into negotiations” with several biotech companies about joint in silico discovery projects.
Brock and von Bohlen each acknowledged that one of the company’s challenges lies in convincing biotechs and pharmas that it can complement their internal bioinformatics capabilities.
“That has always been one of the major issues in the bioinformatics industry,” Brock said, noting that so far the firm has been able to convince partners and potential customers that “what we bring to the table is very much complementary and — more importantly — adding value to what they are doing.”
Von Bohlen cited the company's experience with MD Anderson as an indication that it has staying power. "When we came to MD Anderson and we were talking about this, there was good interest in the beginning that led to the first agreement" he said. However, after the company proved it could deliver on the clinical IT consulting project, MD Anderson gained a lot of trust in the organization, “so the basic interest that was there at the beginning turned to strong interest now from several groups to address the same type of questions,” which ultimately led to the second, revised agreement.
While conceding that there are big differences in marketing Life Biosystems' model compared to a tool-based offering, von Bohlen said he's convinced that "if you deliver tangible outcome and valuable results on what you say and you keep your promises, then you'll find a growing community who will want to work with you."