Seattle’s PhaseRx transforms its business plan to create new therapeutic options to treat liver cancer
By Eran Moore Rea
C4C Impact Investigations ask: where do UW start-ups go when they leave UW? Our start-ups create economic, social, and environmental impact in Washington state. Let’s check back with some of our early start-ups—now established companies—and investigate their influence and effect.
In early 2008, PhaseRx raised $19 million in venture capital funding.
“This was right before the window closed,” CEO Robert Overell said. “If we hadn’t got that money then, we wouldn’t have gotten off the ground. We couldn’t have raised that money three months later.”
But in 2010, the company needed to break off from its original business model.
The economic downturn led to less investment, shrinking market sizes and fewer customers all around. Speculative areas like breakthrough biotechnology were hit particularly hard.
Breakthrough cancer treatment
Cancer is caused by mutated genes. Genes are short segments of DNA that “instruct” a person’s cells. Gene mutations can lead to uncontrolled cell growth, creating tumors that invade tissues and spread to other parts of the body.
The best way to stop cancer growth is with drugs that can influence these key cancer genes. But, even with modern pharmaceutical chemistry technology, the vast majority of these genes are “undruggable.” No existing drugs can interact with them.
A new and exciting class of large-molecule drugs can interact with these “undruggable” targets, but they can’t access the inside of a patient’s cells – they can’t cross the cell membrane by themselves. They need help.
In 1999, UW researchers discovered a way to get large molecule drugs into a person’s cells. PhaseRx licensed the technology from the UW in 2007.
Dr. Pat S. Stayton, UW professor of bioengineering, and Allan Hoffman, now UW professor emeritus of bioengineering, are both cofounders of PhaseRx. They discovered a family of polymers that allow large molecules to cross the cell membrane and access drug targets inside the cell.
RNAi is the process of RNA-interference, the Nobel-prize winning way of “turning off” certain genes. siRNA are “short interfering” RNA-molecules that can silence the expression of specific genes.
Current drug treatments—small molecule drugs—can cross the cell membrane, but they are only active against 15% of the drug targets in the genome. siRNA therapeutics are able to act against 100% of the genome, but they can’t enter cells by themselves.
PhaseRx’s SMARTT Polymer Technology® allows the siRNA molecules to cross the cell membrane, the critical step in their delivery. Impressive in vivo preclinical data shows that this technology silences more than 99% of targeted gene expression.
PhaseRx’s polymer technology targets specific cells. This means that the payload directs to the desired cells, as opposed to being generally distributed throughout the entire body. In this way, the RNA gene silencing technology is able to “turn off” the genes in cancerous cells while leaving most healthy cells alone.
By virtue of their specific targeting, siRNA-polymer drugs carry less potential to cause side effects. This allows clinicians to treat patients who can’t be treated with other drugs.
Adapting PhaseRx’s business model
In the beginning, PhaseRx ran a technology licensing model: selling its breakthrough intellectual property to big pharmaceutical companies.
“A series of companies were very excited about siRNA delivery technology,” Overell said. “But then, with the change in the macro climate, the siRNA space went through the downward side of the pharmaceutical excitement curve…interest plummeted.”
So Overell and his team developed their own drugs using the company’s technology. Now, the company is looking to license preclinical drug products, not just intellectual property, to big pharmaceutical companies.
“By creating the drug ourselves, we will be more profitable as a business,” Overell said. “Plus, with our technology, we can very quickly generate multiple new drugs.”
PhaseRx’s drugs act against “undruggable” targets to treat hepatocellular carcinoma (HCC), the most common type of liver cancer. HCC is the third largest cancer worldwide by number of deaths per year.
There is only one drug currently on the market to treat the HCC—a $1 billion/year drug. Overell believes that PhaseRx’s products can improve the lives of HCC patients and will command a similar or greater market value.
Overell says the company will stay in Seattle. The company currently operates out of 12,000 square feet of laboratory and office space in Seattle’s Lower Queen Anne neighborhood.
“There’s such a dire need for new therapeutic options to treat liver cancer,” Overell said, “and it is clear doctors and patients are looking for these drugs.”