Entrepreneurial Breakthrough Was a Start
UroGenesys, a start-up biotechnology company in Santa Monica, is aggressively searching for new ways to treat and diagnose prostate cancer, now the second-leading cause of male cancer deaths after lung cancer.
By focusing on prostate and other urological cancers--tumors of the kidney, bladder and testes--the firm is unique among biotech companies, says UroGenesys President and Chief Executive Donald B. Rice.
But there are a number of other ways that UroGenesys has set itself apart.
Other biotech start-ups work hard to scrape together an initial $250,000 in seed money. UroGenesys raised $8 million within months of its founding in late 1996--most of it from a small number of individual investors.
Without a product on the market or even one ready for testing in patients, it just completed a second round of funding, this time for $11 million.
UroGenesys is one example of how biotech companies in Los Angeles and Orange counties are overcoming obstacles to doing business in the Southland, such as a scarcity of venture capital and difficulties in finding suitable laboratory space.
The company was founded by a group of professors from UCLA, a school that only in recent years has begun encouraging entrepreneurial efforts by its medical faculty.
Rice himself is an unusual biotech executive. A chemical engineer and economist by training, he’s been secretary of the Air Force, president of RAND Corp., and president and chief operating officer at Teledyne Inc., a company known for rocketry, not clinical oncology.
“We had our hesitation about a chemical engineer,” said Dr. Arie Belldegrun, the company’s founder and chairman. “At the end of the day, whatever Teledyne is doing, we are doing, building guided missiles. But we send them to attack cancer cells.”
In fact, it was UCLA’s close connections to several of Southern California’s leading businessmen and philanthropists that helped bring UroGenesys into the world.
Belldegrun, a surgeon and chief of urological oncology at the Westwood campus, was one of seven UCLA professors who founded the company after weeks of brainstorming. The idea was to build on discoveries they had made in their university laboratories and develop new tools for treating cancer patients--taking ideas, Belldegrun said, “from the lab bench to the bedside.”
They assembled a prestigious panel of scientific advisors, including one Nobel laureate. And like the parents of a lot of embryonic companies, they approached venture capitalists only to find that they were interested “in owning you, in controlling how you do business,” Belldegrun said.
They turned instead to a small group of successful businessmen with ties to UCLA. Among these patrons were the late Henry Singleton of Teledyne and Simon Ramo, the “R” in TRW.
Ramo said in a recent interview that he encouraged the UCLA scientists to form their own company, helped them find investors and, with Singleton, recruited Rice, whom he’d known for years. Ramo said he was particularly impressed with Belldegrun’s business acumen: “If I didn’t know he was a physician, a surgeon and a leading one, I’d think he was an MBA who had been in the start-up company business for a long time.”
Initially, the company is focusing on prostate cancer, a disease that afflicts 1,000,000 American men, with 179,000 new cases expected this year. The company estimates the annual market for new treatments and diagnostic tools to deal with this potentially lethal form of cancer at $3 billion.
The key to the firm’s research is a system licensed from UCLA for growing tumor specimens taken from surgical patients and implanted in a special strain of mice.
Not only do the tumors thrive in the mice, but they go through stages just as they would in patients.
At UroGenesys, scientists are zeroing in on the differences between healthy prostate tissue and tumors at various stages--looking for genetic differences in the affected cells. Using sophisticated tools for comparing the cells, the scientists have already discovered more than 30 promising targets for drug therapy or diagnosis. Other potential targets have been licensed from UCLA.
UroGenesys is “developing a large portfolio of patents as we go along,” said Aya Jakobovits, the company’s director of research. The firm is producing antibodies to attack cancer cells and vaccines to stimulate the patient’s immune system, and other therapies that destroy tumors, she said.
Company officials consider Jakobovits a scientific catch because of her long experience in the biotech industry. At Abgenix, she headed the team that developed the XenoMouse, a commercially successful strain of mice engineered to produce human antibodies.
Most of the company’s 21 employees are scientists, including seven PhDs--several trained at UCLA.
It was important to the UCLA founders that the company be located nearby, Belldegrun said. “There’s a need to talk, and scientific interaction is very important. We didn’t want to move far away.”
The company found 10,000 square feet of lab and office space in Santa Monica that it is leasing from Xoma, a Berkeley-based biotech company.
Like a growing number of young biotech businesses, UroGenesys is contracting out chunks of its research and development efforts. For example, it sends genes it has isolated to a company that specializes in deciphering the genetic code.
The firm pays UCLA for the board and care of its experimental mice, which are housed in spare laboratory space on campus.
Under its business plan, UroGenesys will test promising therapies in animals, but it is seeking partners to take the products to market.
“We are currently having discussions with a number of large companies, either major pharmaceutical or biotech companies, for licensing or research and development collaborations,” Rice said.
Rice acknowledges that competition is fierce to develop new treatments for advanced prostate cancer.
At least 47 new biotech drugs for prostate cancer are being tested in patients, according to an industry survey by the Pharmaceutical Research and Manufacturers of America.
And one competitor foresees a potential patent fight on the horizon over rights to genetic instructions found in prostate tissue, on-off switches called promoters and enhancers.
Daniel R. Henderson, the chief executive officer of Calydon in Sunnyvale, says his firm and UroGenesys appear to be looking at similar approaches to using these switches in gene therapy. Calydon has spliced one of these gene fragments to a common-cold virus, so that it will work only in prostate cells and kill them. Johns Hopkins University researchers are testing the genetically engineered virus in patients.
A patent fight will develop, Henderson said, but only if the approach can be made to work.
Jakobovits won’t comment on Henderson’s claim, except to point out that UroGenesys recently won a broad U.S. patent covering the gene sequences it licensed from UCLA, which were discovered by Belldegrun and others.
“There are plenty of companies doing things in prostate cancer,” she said, “but to the best of my knowledge, UroGenesys is the only one that is focused on gene discovery and validation using multiple approaches.”
