Fungi could be considered a forgotten fountain of drug discovery. These microorganisms led to a wave of transformational life-saving medicines still used today as antibiotics, immunosuppressants, and for lowering cholesterol. But those drugs are old ones and fungi-based drug research has mostly dried up in recent decades. The large pharmaceutical companies that had invested time and resources found it harder and harder to discover promising drug leads, explained Gregory Verdine, co-founder and CEO of biotech startup LifeMine Therapeutics.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Verdine believes fungi have plenty left to offer, and all that’s needed is a way to tap into that well. LifeMine has developed technology that analyzes the genetics of fungi and identifies small molecules that they make—molecules that are potential new drugs.
“Fungi have been on the planet about 1 billion years, they’ve already been subjected to hundreds of millions of years of optimization,” Verdine said. “What we’re doing is accessing that.”
LifeMine now has $175 million to fuel that hunt along with a new drug discovery alliance with GlaxoSmithKline, which is jumping back into the fungi drug research that many of its big pharma peers abandoned. The round of investment announced Wednesday is a Series C financing, which was led by Fidelity Management & Research Company, a new investor in the Cambridge, Massachusetts-based biotech startup.
Many of the drugs people use today were designed by chemists. Verdine, a serial entrepreneur and former Harvard University chemistry professor, likens the effort to starting with a group of atoms, and plugging things onto them the way you might add on to a set of Lego blocks. It works, and many drugs available today were developed this way. But Verdine said the problem is that this approach has a huge failure rate and is really slow. Long before this synthetic approach became the prevailing way to do drug discovery, the search for new medicines was based on natural products, which are the substances produced by living organisms, such as fungi.
Fungi are useful in drug research because the substances that they produce come out pretty close to a finished drug without needing much additional tweaking, Verdine said. Lovastatin, the first cholesterol-lowering statin drug, comes from Aspergillus terreus. Penicillin comes from Penicillium fungi. The molecules for those medicines can come straight out of the fungus and go into a patient, Verdine said.
The usefulness of fungi-derived drugs is counterbalanced by a big obstacle. Fungi spit out tens of thousands of compounds, making it hard to figure out which ones do what, Verdine said. Without a way to efficiently identify promising molecules, big pharma companies stopped doing fungi-based drug discovery. LifeMine has developed a proprietary platform that employs high throughput biology, artificial intelligence, and other technologies to search for the molecules that have a target and a biological function that could have application in humans as a drug. Rather than searching for potential drugs in the sea of molecules, LifeMine searches fungal genes. Verdine said LifeMine’s approach is like searching for the blueprints for the factory that makes a product rather than searching for the product itself. Discovering the blueprints provides insight into the product, which in this case is a potential drug.
“That’s something that we couldn’t do until recently, which is know what is the function of a drug from a gene,” Verdine said.
LifeMine’s roots go back to 2016, when Verdine joined up with co-founder and Chief Operating Officer WeiQing Zhou, who was then an entrepreneur-in-residence at WuXi Healthcare Ventures, along with Hingge Hsu, a venture capitalist and senor advisor to WuXi Healthcare Ventures. Richard Klausner, whose experience includes founding Juno Therapeutics and Grail, joined as a co-founder in 2017 when the company raised its $55 million Series A round. Last year, LifeMine raised another $50 million in a Series B round that marked progress including the acquisition of fungal strain collections from Pfizer and Merck, among other pharma giants.
The startup aims to use some of the new capital to develop its internal pipeline. While fungi-derived molecules could have applications in a wide range of therapeutic areas, the startup’s lead programs are focused on genetically validated drivers of cancer. This research is separate from the GSK drug discovery alliance. Verdine said the seeds of that partnership were planted about two years ago in a conversation with Hal Barron, the pharma giant’s chief scientific officer, and Tony Wood, its senior vice president of medicinal science and technology (Wood will take on the chief scientific officer role after Barron leaves this summer). According to Verdine, the trio talked about how to deploy LifeMine’s science in the most impactful way. By the end of last year, the executives hammered out the details of the drug discovery alliance.
Under the terms of the agreement, the companies are equal partners in discovery work identifying small molecule leads that could address up to three undisclosed targets in humans. Those targets, which will be provided by GSK, address multiple disease areas that remain undisclosed. GSK is paying LifeMine $70 million up front, comprised of cash and an equity investment that is part of the Series C financing announced Wednesday. If the research produces molecules that can be advanced into human testing, GSK will take over their development. LifeMine stands to earn milestone payments tied to the progress of these drug candidates, plus royalties from sales of any commercialized products.
While talking with GSK, Verdine said LifeMine was not looking for other partners. But the deal is not an exclusive one and LifeMine is now open to additional alliances. The biotech’s discovery engine is scalable, and could be used to pursue drug research across multiple therapeutic areas, Verdine said.
“There’s a lot of room for discovery, we’ll do other deals,” he said.
LifeMine’s latest financing included new investors Invus and 3W Partners Capital, as well as GSK’s participation via the strategic alliance. The round also included earlier investors GV, ARCH Venture Partners, Blue Pool Capital, and MRL Ventures Fund.
Photo by Flickr user Albert Straub via a Creative Commons license
