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Leonard is an editor of Before joining the blog, Leonard amassed 36 years of experience as a financial journalist, editor and manager with The Wall Street Journal and Dow Jones News Service, and The Globe and Mail’s Report on Business, where he pioneered the development and... More
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  • In Conversation With InDanio Bioscience

    Prakash Gowd has parlayed a 20-year career in the life sciences, pharmaceuticals and investment fields, including stints as an equity analyst with National Bank Financial and Canaccord Capital, into the executive suite of closely held InDanio Bioscience. He achieved No. 1 Starmine ranking for "Top Stock Picker, Healthcare" in Canada and was involved in securing over $400-million in financing for Canadian healthcare companies. In the 1990s, he held various pharmaceutical new product planning, commercial development and marketing management positions with GlaxoSmithKline. Mr. Gowd has experience in consulting and board directorship and also mentors early-stage ventures at the MaRS Discovery District, a life sciences and technology incubator in Toronto-all experiences he will tap at early-stage InDanio, an in vivo drug discovery company dedicated to developing new medicines targeting nuclear receptors. In this interview with, Mr. Gowd discusses InDanio's innovative technology and how it plans to leverage the technology commercially and build value.

    Let's begin with a brief history of InDanio.

    The scientific founders, Dr. Henry Krause and Dr. Jens Tiefenbach, formed InDanio as a technology spinoff from the University of Toronto. Dr. Krause is a professor in the Banting and Best Department of Medical Research at the University of Toronto. Dr. Tiefenbach has been intimately involved with the company's technology and is the chief scientific officer. They are experts in the field of nuclear receptors and are both co-inventors named on the patents that protect the company's platform technology. I joined the company as CEO six months ago to help translate the innovative technology into a viable business venture. Our vision is to be a leader in the discovery and development of nuclear receptor-targeted medicines, specifically in the areas of metabolic disease and cancer. To reach our current stage of company development, we have gratefully received support from the Ontario Centres of Excellence, the Ontario Genomics Institute and the MaRS Discovery District.

    Why focus on nuclear receptors?

    Nuclear receptors are an important class of drug targets in the body. There are 48 known human nuclear receptors that make up this family of intra-cellular proteins, and they are extremely important as they regulate gene expression and control metabolism, homeostasis and development. Nuclear receptors play a role in numerous disease states from metabolic disorders, such as obesity and diabetes, to cardiovascular disease, inflammation and cancer. Roughly 15% of all pharmaceuticals on the market target nuclear receptors, including: corticosteroids for inflammation such as Flovent and Pulmicort; hormone replacement therapies like Premarin and Synthroid; anti-diabetic drugs, Actos and Avandia; Evista for osteoporosis; as well as anti-estrogen and anti-androgen drugs for cancer. Our mission is to leverage our proprietary nuclear receptor drug screening technology to help industry partners enhance the efficiency, accuracy and cost-effectiveness of their nuclear receptor drug discovery efforts and to discover our own target candidates for longer-term value creation through clinical development and partnering.

    Can you briefly explain how the technology works?

    Our technology involves the insertion of human genes that code for nuclear receptors into the genome of zebrafish. We have the ability to produce 48 different lines of transgenic zebrafish, each corresponding to one of the 48 known human nuclear receptors. There are two important functional aspects to the technology. First, when a drug interacts with a nuclear receptor in our transgenic zebrafish, a green fluorescent protein is expressed that can be visualized under a microscope to identify exactly where in the zebrafish the drug is bound, which allows automated screening for changes in fluorescent activity. Second, the technology incorporates affinity tags to extract and purify the nuclear receptor-drug complex from the zebrafish, and using mass spectrometry, we can identify exactly what is bound to the receptor site. It is the zebrafish embryos that we use for screening, as they are transparent, develop ex utero, can be obtained in large numbers and are amenable to high throughput screening.

    [The pictures below show receptor activation and corresponding fluorescence in the PPARγ zebrafish embryos in solvent and in the presence of rosiglitazone (drug specific for PPARγ). Using this model, we can also assess drug distribution, stability, tissue specificity and toxicity.]

    (click to enlarge)

    Why is this technology important?

    InDanio's system can be used to screen compound libraries in order to identify and refine potential new drugs that target nuclear receptors. Visualization of drug/tissue binding in our system allows us to screen compounds for tissue and receptor specificity. In drug screening, it is important to know exactly what chemical is bound to the receptor. This can be the actual drug, a drug metabolite or a drug/co-factor combination. This information helps to determine the exact mechanism of action of the drug. Furthermore, knowing what binds to the receptor will allow you to modify the chemical structure of the drug to either increase its efficacy or reduce its side effects through drug optimization. Our screening system can also be used to functionally characterize "orphan" nuclear receptors - those for which a natural ligand or specific function is unknown - and thereby create new targets for drug discovery.

    (click to enlarge)

    InDanio's technology has the potential to replace a great deal of in vitro
    testing and to reduce the amount of animal testing for NR-targeted drugs
    (*Primarily cell-based assays)

    Many drugs never reach the marketplace or fail in trials, because they fail toxicology tests or have other unintended effects on the body. Currently, in vitro testing is often not an effective predictor of how drugs will affect living organisms. By beginning the screening process with in vivo assays using live zebrafish, more information on a drug's effectiveness, toxicology and other side effects can be gathered in advance of, and to better inform, downstream clinical trials.

    Is this something you would license out to others or use to develop your own drugs?

    Both. In the first part of our business model, we will leverage our proprietary platform to generate revenue through licensing our technology to pharmaceutical companies, through drug screening collaborations and by developing assay kits to sell to pharma clients. Secondly, we plan to use our technology to discover and develop our own nuclear receptor-targeted pipeline.

    Whom does InDanio compete against?

    Our primary competition is the in vitro cell-based assays offered by numerous companies and widely used in drug discovery research today. This methodology uses human cells, genetically altered and cultured in a medium, which then are exposed to drugs to determine which bind the specific receptor.

    How do you differentiate yourself from the competition?

    Our technology is superior to currently used cell-based assays (in vitro) for nuclear receptor drug screening. Clearly, cell-based assays cannot assess and account for a drug's interaction with the complex processes found in a living system (a whole living animal). Cell-based assays do not provide information on drug absorption, distribution, metabolism, excretion, toxicity (ADMET) or the differential distribution of cell specific cofactors. Results from cell-based assays often poorly correlate with animal testing, because the complicated physiological environment is absent in the in vitro testing system. Consequently, animal studies are essential to validate hits and exclude compounds with poor ADMET properties, which account for significant attrition in costly clinical trials. These lost years and investment would be avoided by beginning the screening process with a well-designed animal screening system such as ours. Our screening process provides the added information of general specificity, toxicity and tissues targeted by each lead and can greatly decrease the possibility of failure in animal and clinical trials.

    What screening success have you had so far?

    We have successfully validated our platform technology by screening well characterized drugs using specific transgenic fish lines. Through the screening of a publicly-available drug library, we identified a drug that has dual PPARα and PPARγ partial agonist activity, something that has never been shown before for this drug. Given this dual receptor activity and tissue selectivity, it could be a potential treatment for metabolic disease (obesity and/or Type 2 diabetes), with an improved side effect profile. We are in the process of filing a new patent based upon our results with the drug, IDB-101, and related compounds for metabolic and other PPAR-related diseases.

    Do you have any timelines around your development plans?

    For our internal drug candidate, IDB-101, we hope to have a proof-of-concept preclinical study completed in the first half of 2013 and, with positive results, enter licensing discussions shortly thereafter. In regards to assisting pharma companies, we plan to focus on building out relevant transgenic zebrafish lines during the next six-to-12 months. We have identified 32 lines that play a prominent role in metabolic disease and cancer, and after we build out a significant number of them, we'll be in a position to offer pharma companies a suite of assays for their drug discovery work. To do that, we are looking to raise non-dilutive financing through public organizations and are currently working on a number of initiatives.

    Is there anything happening on the partnering front?

    I attended the BIO conference this year and met with a dozen pharmaceutical companies, most of whom were very intrigued with our technology and its prospects. We are in early-stage discussions with a few pharma companies who are evaluating where our technology would fit in their drug discovery efforts. We are actively seeking partners for drug screening collaborations, as well as companies that have drug leads and would like to optimize their compounds. We believe that our discussions will become more fruitful once we have a greater number of assays available to offer.

    How does InDanio fit into pharma outsourcing R&D?

    The pharmaceutical industry has gone through a significant amount of R&D restructuring as a result of mergers and the desire to increase R&D productivity. Outsourcing early-stage discovery is a growing trend, and we consider InDanio to be part of that outsourcing industry. We believe our technology will benefit pharmaceutical clients by increasing the accuracy and efficiency of their nuclear receptor drug screening programs, reducing the time and cost of discovery work and increasing the hit-to-lead success rate, which involves moving the best drug candidates from screening to preclinical development. The end result will be safer and more effective medicines being brought to market sooner.

    (click to enlarge)

    Using an in vivo screening platform earlier in the discovery process can
    save time and money, and increase the clinical success rate

    What do you see as the market potential for your technology?

    I believe InDanio's nuclear receptor drug screening platform can form the basis of a profitable standalone business, with our drug development initiatives separately funded. The technology has already been proven, and with a critical mass of assays developed, we can then tap into the growing pharma drug discovery outsourcing trend. Drug discovery outsourcing represents an estimated annual market of $7.5-billion worldwide. If we look at cell-based assays as our competition, that's around a $3-billion market and the portion of cell-based assays that are nuclear receptor-focused is some $300-million. With our technology having significant competitive advantages, we should be able to garner a decent share of that $300-million addressable market.

    This interview has been condensed and edited

    Nov 06 10:48 AM | Link | Comment!
  • Verisante Readies Aura Launch For Skin Cancer

    Verisante Technology (OTCQX: VRSEF) is hoping to begin sales in the fall of a breakthrough skin cancer detection device, Verisante Aura, which has been approved in Canada, Europe and Australia.

    Thomas Braun

    "Our device has been shown to be an invaluable tool to assist doctors in determining if a skin lesion might be cancerous and should be biopsied," CEO Thomas Braun says in an interview with, referring to preliminary trial data which showed the technology detected melanoma and all major skin cancers with 99% sensitivity. According to the British Journal of Dermatology, the primary clinical diagnosis of melanoma has a sensitivity rate of 34%.

    Verisante licensed the Aura technology from the British Columbia Cancer Agency in mid-2010, with exclusive rights for the detection of skin, lung, colon and cervical cancers.

    The University of British Columbia's Department of Dermatology conducted a six-year clinical trial at Vancouver General Hospital's Skin Care Center that collected data on 1,000 lesions and focused on differentiating cancerous lesions from benign ones. Clinical study results published inCancer Research in 2012 showed the technology had 99% sensitivity, meaning that it detects 99% of skin cancers tested.

    Over the past year, Verisante re-engineered the original prototype to achieve something more compact, mass producible and commercially attractive for doctors, Mr. Braun says. The new Aura device is being placed in five dermatology clinics in Canada this summer as part of a "beta" study to collect data on 200 biopsied lesions as a final tune-up to a sales launch.

    "We won't start selling until we can deliver, and we won't deliver until we're absolutely positive that it works perfectly," he adds. "We actually believe that we may get better results from the beta testing than the original results, because the device we've built is better than the earlier one."

    If the beta testing is successful, Verisante plans to assemble about 25 Aura units in October, 35 in November and 45 in December.

    "Besides Canada, the markets we're going to focus on are Germany, Switzerland, Austria and Australia, which has the highest incidence of skin cancer in the world," Mr. Braun says. The company already has a distributor lined up for Canada and hopes to nail down the rest of its distribution chain during the summer and fall.

    Zachs Investment Research analyst, Brian Marckx, said in a report that based on preliminary trial data, high throughput and other advantages, Verisante's Aura could eventually become the "new gold standard for skin cancer diagnosis."

    Skin cancer strikes one out of five people in the U.S. and is the most common form of cancer. The National Cancer Institute (NCI) estimates that 40% to 50% of Americans, who live to the age of 65, are expected to get skin cancer.

    Although melanoma accounts for only 4% of skin cancers, it accounts for 75% of skin cancer deaths, and the incidence of melanoma is rising faster than any other cancer, according to the NCI.

    (click to enlarge)

    Early detection vital to saving lives

    Early detection is vital to saving lives. Studies have found that the five-year survival rate of stage-one melanoma can be as high as 99%, dropping to 15% for stage-four melanoma.

    Some two million Americans get skin cancer each year, and the NCI estimates that treating melanoma alone costs $1.5-billion annually in the U.S. At a cost of more than $170,000 per lesion, advanced-stage melanoma is significantly more costly to treat than the early stage of the disease, which costs $1,800 to treat.

    Enter the Verisante Aura, which won the Popular Science "Best of What's New" award in 2011. The non-invasive system provides information about the chemical composition of skin, scanning for 21 different cancer biomarkers in less than one second and providing immediate results.

    Mr. Braun says Aura is designed to increase survival rates, reduce treatment costs, reduce unnecessary biopsies and reduce waiting times to see a dermatologist, since scans can be performed by trained technicians.

    Aura's main competitor is Mela Sciences' (NASDAQ:MELA) MelaFind. While Aura can detect melanoma, squamous cell and basal cell carcinomas - two common types of non-melanoma skin cancers - and actinic keratosis, a premalignant skin condition, MelaFind is indicated for the detection of melanoma only.

    Mr. Braun says Aura differentiates itself from MelaFind in other ways. While MelaFind is approved in the U.S. and Europe, it requires two minutes to scan a lesion using a large probe, compared with the one second required for the more compact Aura.

    Dr. David McLean demonstrates Aura device at Centre for Photomedicine, UBC Dept. of Dermatology and Skin Science

    Among other things, Aura boasts 99% sensitivity and 17% specificity, compared with 98% and 9.5%, respectively, for MelaFind. Mr. Braun says that Aura generates a result that measures the risk of skin cancer for 100% of lesions tested, while MelaFind generates a non-evaluable result 8.6% of the time.

    Verisante is preparing to file an investigational device exemption with the FDA this year so that Aura can be used in a clinical study to collect safety and efficacy data required to support a premarket approval application. Mr. Braun is targeting FDA approval of Aura before the end of 2014.

    During the initial commercial rollout in approved markets, the company plans to sell Aura for $60,000 and collect $10 from the use of each disposable tip that touches the patient. Verisante will also provide service contracts after the warranty expires on leased machines.

    Zachs' Mr. Marckx figures the size and high incidence of skin cancer, combined with Verisante's razor/razor blade business model and low cost base, "means revenue and earnings could ramp very quickly."

    (click to enlarge)

    Verisante Aura: Regulatory pathway to commercialization

    Mr. Braun estimates that there are about 500 dermatologists in Canada, 21,000 in Europe and 350 in Australia, where an additional 1,000 general practitioners are specially trained to treat skin cancer. In addition, there are about 9,500 dermatologists in the U.S. "We're targeting 14% penetration of dermatologists by year five after launch."

    "Skin cancer detection is an underserved market," he contends. "The only other market in life sciences that is comparably large is diabetes, which is very crowded with devices."

    Verisante Core: Enabling detection of other cancers

    In addition to Aura, Verisante has developed an endoscopic system called the Verisante Core to determine whether a lesion in the lung, colon or cervix is malignant or benign. "It's the same platform technology, but with a different probe," Mr. Braun points out.

    Pilot study results published in the Journal of Thoracic Oncology in July 2011 remarkably demonstrated 96% sensitivity and 91% sensitivity for detection of lung cancer. The results warranted continuation of clinical testing by the BC Cancer Agency at Vancouver General Hospital. The study is expected to conclude this summer. Earlier this year, the Canadian Cancer Society named the Core a "Top Ten Cancer Breakthrough".

    At about the same time as the lung cancer study will finish, a colon cancer study will start, Mr. Braun adds.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: long-ideas
    Jul 03 7:46 AM | Link | 1 Comment
  • Hadasit Bio Taps Hotbed Of Innovation At Israel Hospital

    Hadasit Bio-Holdings (OTCBB: HADSY; TASE: HDST), operating as the technology transfer financing arm of Israel's Hadassah Medical Center, has built a portfolio of promising, early-stage biotech companies based on IP generated by the country's foremost medical research center.

    Ophir Shahaf

    "From a business point of view, R&D at Hadassah is very application-based," Hadasit Bio CEO, Ophir Shahaf, says in an interview with

    "This is not R&D aimed at another publication in a peer-reviewed journal. These are hands-on, world- renowned professionals who work with patients, and when they do their R&D, they are much more focused to create solutions for the problems they encounter on a daily basis," he adds.

    While the ownership of hospitals in Israel is often shared by municipalities, the Ministry of Health and private institutions, Hadassah Hospital is privately owned by the Hadassah Women's Zionist Organization of America. The 100-year-old group established two university hospitals-one on Mount Scopus in 1939 and another at Ein Kerem in 1961, which now boasts a medical and biotech campus of 28 buildings. The Hadassah Medical Center is now the country's third largest hospital group in terms of beds. It also accounts for 52% of applied biotech research in Israel, generating over 50 new patent families a year.

    "The ratio between R&D per PhDs at Hadassah is far higher than any other medical institution in Israel," Mr. Shahaf says.

    Hadasit Bio was established in 2005 and went public in 2006, raising $8 million in its IPO and another $25 million since then, as well as $8 million in non-dilutive funding from Israel's Office of the Chief Scientist. The company is 37% owned by the Hadassah Hospital, 10% by the Consensus Business Group, a British private equity and financial services group, and 53% by public investors.

    "We are structured as a holding company, as lean as possible, and the goal of my team, which includes a scientific analyst, a CFO and a controller, is to raise money, transfer it to our portfolio companies and build value within them in order to attract financial and strategic partners, by leveraging Hadassah's state-of-the-art infrastructure and world-renowned physicians," Mr. Shahaf explains.

    The six companies in Hadasit Bio's current portfolio are targeting oncology, regenerative medicine and inflammatory disease. Hadasit's strategy involves funding preclinical work as part of the preparation for, and execution of, Phase 1 clinical trials and preparation for Phase 2 studies by portfolio companies.

    "This is the sweet spot for return on investment within early stages of clinical development," Mr. Shahaf says, pointing to historical data from Ernest & Young that shows Phase 1 studies have a 76% success rate against a requirement of 2% of the total investment, both compared with other phases of clinical testing.

    (click to enlarge)

    The Israeli Biotech Value Chain

    "We know how to raise $2 million to $4 million over this span of time in a company's development," he adds. "We bridge the gap between angel investors and other early-stage sources of funding, on [the] one hand, and venture capital funds and institutional investors, on the other hand. The goal is to generate enough clinical data to be of interest to a potential partner."

    Mr. Shahaf likes to say that Hadasit Bio's competitive advantage resembles I3: innovation, investments and infrastructure. Innovation stems from its access to Hadassah's R&D; investments reflect its expertise in raising money; and infrastructure refers to its portfolio companies being based within the Hadassah hospitals, with access to expertise, labs and equipment, as well as facilities for drug manufacturing, animal testing and clinical trials.

    (click to enlarge)

    3 Companies in Phase I; 3 companies to Enter Phase I/II within Next 12-18 Mths

    Three of Hadasit Bio's holdings - Enlivex Therapeutics, Thrombotech Technologies and BioMarCare Technologies - are in early-stage clinical trials. Three others - Cell Cure Neurosciences, ProtAb and KAHR Medical - are set to begin Phase 1/2 testing within 12 to 18 months.

    Enlivex, which is working on a treatment for graft-versus-host disease (GvHD), a complication that can occur after a stem cell or bone marrow transplant, has completed a Phase 1/2 trial, with final results expected within three months, Mr. Shahaf says.

    Between 30% and 80% of the patients going through bone marrow transplant develop GvHD, which can be fatal. There is no effective treatment to prevent GvHD, which remains a major obstacle in successful bone marrow transplants. "Thus far, Enlivex's results look very promising," Mr. Shahaf says.

    Mr. Shahaf explains that Enlivex has developed a way of manipulating cellular mechanisms in donor cells ex vivoand then adjusting recipient cells as a way of "bringing down the clinical level of GvHD from three-to-four to one-to-two, which is the exact solution hematologists are looking for."

    Enlivex has a pre-IND meeting with the FDA in a couple of months and is hoping to obtain both orphan drug status and fast-track designation. That would allow the company to leapfrog a classic Phase 2 study and move directly into a pivotal Phase 3 trial. Mr. Shahaf says Enlivex is negotiating with several VCs to help fund the next clinical trial.

    "With all our belief in this company, Hadasit Bio is not capable of funding the next trial exclusively - an expense estimated at around $12 million to $15 million, including global multicenter sites, GMP and analysis," he contends.

    "We've brought the company to this point, we've shown clinical data, which is extremely convincing, and now we need to bring in external financing. We are not interested in retaining our currently high equity ownership in Enlivex. I'd be very happy with a smaller piece in a larger pie and have several VCs sharing the financial risk and participating in the management of the company."

    Hadasit Bio has already found external investors for Cell Cure, which has developed its OpRegen product using a platform technology to turn embryonic stem cells into retinal pigmented epithelium cells and then transplanting them in order to treat dry AMD. Alongside Hadasit's 26% stake in Cell Cure, BioTime (AMEX:BTX) has a 54% stake and Teva (NASDAQ:TEVA) 20%.

    "In rodent models so far, the results have been amazing," Mr. Shahaf says, adding that the "technology has the potential to effectively restore eyesight."

    Cell Cure's OpRegen is targeting some seven million Americans who are at high risk for developing visual impairment due to dry AMD and the one million who already have severe dry AMD with visual impairment. While the acute form of wet AMD can be treated with Lucentis, many industry analysts are suggesting that a treatment for dry AMD will compare with the cost of Lucentis, which often requires monthly doses costing $2,000 each.

    While Cell Cure is initially targeting dry AMD, Mr. Shahaf says that at some point, the company will turn its attention to finding a solution for wet AMD.

    Eight months ago, Hadasit Bio attracted a $2 million investment by Sanofi-Aventis in Hadasit Bio's KAHR Medical subsidiary, with a first right of negotiation to license the technology. KAHR is now working on an additional financing round of $3 million from Sanofi and a European-based investor.

    Mr. Shahaf explains that KAHR is developing a technology platform that can generate a host of compounds classified as signal converter proteins (SCP), which allow the construction of protein-based drugs with two functional sides, as opposed to current biological drugs that have only one functional side. The two functional sides of SCPs potentially allow these drugs to block or activate "two reinforcing biological signals" at the same time, opening the possibility of a new generation of biological drugs with superior efficacy.

    Last week, the Binational Industrial Research and Development Foundation awarded a $900,000 grant for a joint project between Hadasit Bio's BioMarCare subsidiary, and American partner, Ariadne, to develop a panel of biological markers that will predict response or lack of response to drugs based on inhibitors of the EGF receptor, which is an active receptor on the cell wall. Drugs tested will include drugs such as cetuximab for metastatic colon cancer patients.

    BioMarCare is Hadasit Bio's only diagnostic play. The company is developing diagnostic kits for the early detection of cancer using a minute amount of a blood sample or standard biopsy.

    Under the accord, BioMarCare will develop the test and Ariadne will be responsible for the more comprehensive clinical trials, regulatory approval and product launch in the U.S., while BioMarCare has reserved the right to commercialize the product in Europe.

    Hadassah Hospital

    In March, BioMarCare received a strategic investment from a subsidiary of BioLight, which is chaired by Israel Makov, the former CEO of Teva Pharmaceuticals. "His vision is to set up a cluster of diagnostic companies with critical mass, boosting the odds of making it to the big league," Mr. Shahaf says.

    "The company's affiliation to the Hadassah Medical Center is the key to its success, allowing for productive interactions with the hospital staff and valuable access to a sample base of thousands of biopsies and blood samples, which is critical in diagnostics," he says. "This was definitely one of the key drivers behind this deal."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 18 9:36 AM | Link | Comment!
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