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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 BioTuesdays.com, 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.]

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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.

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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.

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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