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Kylin to Use $250,000 Grant from Indiana Economic-Development Fund to Add Staff

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Kylin Therapeutics plans to use a $250,000 Indiana Economic Development Corporation grant to expand its workforce and continue developing a proprietary RNAi-delivery technology licensed from neighboring Purdue University, a company official told RNAi News this week.
 
Kylin currently employs six people — four of whom were hired since the grant was officially awarded last December — but that number could double over the next year as the company works to raise additional cash and gather data supporting the use of its packaging RNA, or pRNA, delivery technology as a therapeutic and research tool, Eric Davis, Kylin’s president, CEO, and co-founder, told RNAi News.
 
“The academic environment can take [a technology] so far, and [Purdue] had taken it through a lot of in vitro validation and … some animal work,” he said. “But to take it to the next level [requires] more standardized in vivo tests and in vivo results. Obviously, it takes people to do that.
 
“It’s difficult to support the kind of … efforts you need with a company like ours without that many people,” Davis added.
 
The grant was awarded by the IEDC’s 21st Century Research and Technology Fund, which doesn’t usually provide cash to companies as early-stage as Kylin. However, the award was a “calculated risk with the opportunity for tremendous upside potential” given the promise of RNAi-based therapeutics,” according to the group’s entrepreneurship committee.
 
“The 21st Century Fund provides critical seed capital to emerging high-growth companies such as Kylin … that are necessary to ensure our state’s economic growth,” Indiana Governor Mitch Daniels said in a statement.
 
Despite the IEDC funding and $1.2 million in seed financing it secured in late 2007 from its existing investor base, Kylin remains on the lookout for additional capital, Davis noted.
 

“The academic environment can take [a technology] so far … but to take it to the next level [requires] more standardized in vivo tests and in vivo results. Obviously, it takes people to do that.”

Specifically, the company is aiming to close a round of institutional investment in late 2008 or early 2009, he said. “At that point in time, in conjunction with [the IEDC funding], we’d be at a minimum doubling our workforce.”
 
He declined to disclose how much the company hopes to raise, but said that he expects interest in the financing round will largely rely on positive in vivo data for the company’s core technology, called packaging RNA.
 
Packaging RNA is derived from bacteriophage phi29 and characterized by the company as a “gear in the DNA packaging machinery” that can be modified with therapeutic RNA such as siRNA.
 
In May 2006, Kylin co-founder and Purdue researcher Peixuan Gou published data describing the construction of folate-conjugated pRNA for the delivery of siRNAs to cancer cells.
 
And last year, Gou reported that pRNA could be used to escort hammerhead ribozymes into cancer cells.
 
For its in-house drug-development work, Kylin expects to focus on using the pRNA to develop RNAi-based cancer treatments since that is the area in which most of its scientific expertise lies and because it has already formed a partnership with Wyeth’s Fort Dodge Animal Health to develop RNAi-based cancer drugs based on the technology (see RNAi News, 9/20/2007).
 
But at the same time, “we want to show the market that [the technology] has broad applicability” in order to create interest not only from the investment community but also companies that might want to incorporate pRNA for use in their own RNAi drug programs that fall outside of Kylin’s cancer focus, Davis said.
 
To do this, “we would have to show that [pRNA] has strong bio-distribution beyond [that of existing delivery technologies] and that it functions just as well at silencing a variety of targets,” he said. “That’s work that we’re currently doing … [and] we’re making great progress. But we’re not ready to publicly share any data that we’ve developed.”
He declined to specify the targets and tissues being examined in these studies, but noted that the industry “shows a desire to have something that can be systemically delivered [to tissue and organs] beyond the liver, kidneys, and lungs.”
 
Meanwhile, Kylin is also generating data it hopes will demonstrate the potential of pRNA for research applications in order to find a commercial partner to develop tools based on the technology.
 
“We have had a lot of interest” in pRNA from reagent providers sincedelivery remains a challenge for those using RNAi as a research tool, Davis said. But, as with therapeutic use of pRNA, finalizing a deal will require strong data, he added.
 
“To a significant extent, those two paths [towards showing pRNA’s potential as a therapeutic and a research tool] are aligned at the present time [and] we believe that we can demonstrate both” through the work currently underway, he said.