Genomics: progress in exomes and structural variance

The fast rate of progress in many areas of genomics was the most salient dynamic of the Future of Genomic Medicine III conference at Scripps in San Diego CA, March 5-6, 2010. Cancer genomics and pharmacogenomics continue to blossom as wide-ranging fields of applied genomics. Aging and genomics, and the role of genetics in studying disease and the microbiome are nascent and growing. Importantly coming to the forefront for the first time is structural analysis and exome analysis.

Structural analysis of genomes concerns copy number variation (multiple copies of genes), inserted genes, deleted genes, inverted genes and other structural changes, and is found in all classes of traits and disease. There is thought to be 12% structural variation between humans as opposed to 0.1% SNP variation between humans. SNP variation is the 'typos' at specific genetic locations where the normal nucleotide combination is 'AA' and some people have the risk alleles 'AT' or 'TT.”

Using exomes (the 1-2% of the genome that contains protein coding regions) as a cheaper alternative to whole human genome sequencing, and conducting basic SNP analysis together with more complex structural variation analysis, and possibly methylation analysis (which genes are blocked from expression), and RNA transcriptome analysis (levels of DNA expression), could bring more sophistication to DNA analysis for myriad purposes including pharmacogenomics and disease analysis.

Some interesting startup companies are starting to realize these new aspects of genomic medicine:

• Cellular Dynamics, Madison WI (human cells derived from induced pluripotent stem (iPS) cells)
• Integrated Diagnostics, Seattle WA (predictive blood assays of organ-proteins; UCLA melanoma clinical trial)
• Population Diagnostics, Melville NY (copy number variation analysis for pharmacogenomics)

Status of Stem Cell Research

The World Stem Cell Summit in Baltimore MD held September 21-23, 2009 attracted several hundred professionals to discuss contemporary science, industry and societal perspectives on stem cells. Attendance was high, but down from last year and, similar to cancer meetings, a key theme several keynote speakers acknowledged was

the overall lack of truly meaningful progress in stem cell research in the last twenty years.

Science Focus: Safe Stem Cell Generation
The science tracks featured current research in different stem cell areas including the production of safe hESC (human embryonic stem cells) and iPS (induced pluripotent stem cells) for use in regenerative medicine, the research and therapeutic use of mesenchymal stem cells (MSCs) and hematopoietic stem cells (HSCs) and reports from specific sub-fields: cancer stem cells, cardiovascular stem cells and neural stem cells. Overall, the work presented was incremental and in many cases, confirming what has been known already, such as a growing confirmation that cancer stem cells are probably responsible for triggering the resurgence of cancer but cannot at present be distinguished from other cells at the time of tumor removal.

Contract Research Demand: Cell Therapies and Recombinant Proteins
One stem cell area experiencing growth is contract research organizations, the outsourcing tool of choice for research labs and pharmaceutical companies in the production of biological materials. For large contract research manufacturing such as Basel, Switzerland-based Lonza, the biggest demand area is in cell therapies. Cell therapies denote the introduction of any type of new cell into other tissue for therapeutic purposes, but in the current case generally means any variety of stem cell-based therapies. Other large contract research manufacturing organizations such as Morrisville, NC-based Diosynth (owned by Schering Plough) lead in biologics (antibodies, protein production) production, an important area for nextgen biotech where synthetic biology could have a big impact.

For smaller contract research manufacturing organizations producing test compounds (e.g.; 1 liter for $10,000) and scaling to Phase I and II clinical trial quantities such as Baltimore MD-based Paragon Bioservices, the biggest demand is for recombinant proteins. Recombinant proteins are created by inserting recombinant DNA into a plasmid of rapidly reproducing bacteria and can take many useful forms such as antibodies, antigens, hormones and enzymes.

Venture capital hot topics: zinc fingers, RT PCR, tech transfer
Zinc fingers (small protein domains that bind DNA, RNA, proteins and small molecules) have been surfacing in a variety of cutting-edge biotech innovations. In July 2009, St. Louis, MO-based biotechnology chemical producer Sigma-Aldrich (SIAL) announced the creation of the first genetically modified mammals using zinc finger nuclease (ZFN) technology to execute modifications such as taking away the tail of the zebrafish. A second example of recent landmark research involving zinc fingers is that of Carlos Barbas at Scripps who uses zinc finger proteins to reprogram serine recombinases as a more specific alternative to the homologous recombination method of genome modification. In addition, the Barbas lab has a useful web-based zinc finger protein design tool available for public use, Zinc Finger Tools.

Real-time PCR offerings continue to expand and flourish with declining prices as startup newcomer Helixis announced a $10,000 real-time PCR solution at the conference.

Bethesda, MD-based Toucan Capital, a leading investor in stem cells and regenerative medicine discussed their sixteen interesting portfolio companies such as San Diego CA-based VetStem who is conducting joint and tendon stem cell therapies for race horses.

Johns Hopkins has one of the country’s leading technology transfer programs, licensing a growing number of technologies each year (nearly 100 in the last fiscal year), and has a searchable, though not extremely user-friendly, website.

VC guide to anti-aging biotechnology investing

Several promising startup companies focused on the nascent but obviously significant and growing anti-aging biotechnology space were present or discussed with interest at the recent SENS4 (Strategies for Engineered Negligible Senescence) conference in Cambridge, U.K., September 3rd – 7th, 2009 (program) (full conference report).

1. Epeius Biotechnologies, San Marino, CA, USA: Rexin-G, a tumor-targeted injectable gene delivery system
2. FoldRx, Cambridge, MA, USA: small molecule therapeutics to treat protein misfolding diseases, and bind and clear undesired molecules
3. Gencia Corporation, Charlottesville, VA, USA: mitochondrial DNA rejuvenation using the rhTFAM (recombinant-human mitochondrial transcription factor A) protein
4. Genscient, Fountain Valley, CA, USA: novel chronic disease therapeutics by combining genomics and selective screening (a large Alzheimer’s Disease genetic study is in progress with Kronos and TGen)
5. Knome, Cambridge, MA, USA: whole human genome sequencing (consumer offering)
6. Neotropix, Malvern, PA, USA: oncolytic viruses for the treatment of solid tumors
7. Pentraxin Therapeutics Ltd, London, UK: small molecule drug CPHPC specifically targeting SAP (serum form of amyloid P) and removing it from the blood and brains of patients with Alzheimer’s Disease
8. Repeat Diagnostics, Vancouver, BC, Canada: telomere length measurement for total lymphocyte and granulocyte populations (consumer offering)
9. Retrotope, Los Altos Hills, CA, USA: using isotope effect to slow down damage pathways and control metabolic processes associated with oxidative stress
10. StemCor Systems, Inc., Menlo Park, CA, USA: bone marrow harvesting system
11. T.A. Sciences, New York, NY, USA: telomerase activation via the single molecule TA-65, licensed from Geron Corporation (consumer offering)
12. TriStem Corporation, London, UK: retrodifferentiation technology to create stem cells from mature adult cells

Economic fallacies II

Fallacy #3: The singularity is a great investment opportunity
A technological revolution like that brought about by the PC or the Internet is a great investment opportunity. Current possibilities for this kind of compound growth in technology-driven financial returns include alternative energy, genomics, personalized medicine, anti-aging therapies, 3d data manipulation tools and narrowly-applied artificial intelligence.

A technological singularity is not necessarily a great investment opportunity. A technological singularity implies change so radical and diffuse that prior models for understanding and exploiting or profiting from the world will no longer work. There is a substantial risk that financial markets as they are known today could disappear. Growth, alpha and superior financial returns may be irrelevant in a post-traditional financial markets era. Planning for the possibility of a technological singularity suggests a much broader definition of what the assets of the future may be and allocating to these areas, a substantial shift away from the traditional asset preservation and financial returns that outpace inflation in the long-run mindset of today.


Fallacy #4: Economic systems become irrelevant in a post-scarcity economy
This is the notion that economies and markets go away in a post-scarcity economy for material goods. At present, an increasing number of goods and services are becoming available for free or offered via modern business models such as the freemium. In the future, substantially all material needs may be easily met at low cost or for free in a molecular-nanotech society, but scarcity as an economic dynamic is likely to persist and economics systems in general are also likely to continue.

Scarcity would be perceived in whatever material resources were not yet plentifully available and in any finite resources such as time, ideas, attention, emotion, reputation, quality, etc. Economic system dynamics could change substantially, for example, property tax would not make sense in a world where nanotech could rapidly build or absorb structures. Unless economics and markets as the most effective means of resource distribution are superceded, they are likely to endure.


Fallacy #5: Social capital markets need not deliver competitive returns
The conventional notion is that it is acceptable for social capital market investments to deliver lower returns than traditional financial instruments. Social capital market investment products include SRI equity funds, corporate governance initiatives, social capital venturing (private equity), fair trade coffee and organic products. On average, consumers are willing to spend 5% more for attribute products (products with affinity attributes such as fair trade, local, organic, etc.) and investors have been willing to sacrifice 5% or more in financial return for socially responsible investments.

However, after some implementation time lag, social capital could have equal or higher returns. Sustainable socially responsible businesses should be more profitable not less. Both direct tangible economic benefits can accrue as well as the indirect benefits of marketing and market-knowledge that the business is more principled and sustainable. Corporate governance and other green or social initiatives should benefit the bottom line, not penalize it. The notion that return and social good are mutually exclusive is a fallacy.

The article with all nine fallacies is available here

VC life extension opportunity redux

The VC life extension investment opportunity could happen in at least three areas: first and most importantly, translational medicine, second, health social networks and third, distantly, standardized longevity treatments and delivery systems.

Translational medicine
The biggest and most obvious longevity play for VCs is in translational medicine, shepherding and commercializing science findings from basic research to patient therapies. The vast majority, perhaps even 90% or more, of basic research findings never go beyond the lab or journal publication. A particularly high profile example of an early stage longevity company that rocketed from test tube to IPO to big pharma acquisition is Sirtris, bought by GlaxoSmithKline for $720M in June 2008. Some other early stage translational medicine longevity startups are Elixir Pharmaceuticals, Juvenon and Sierra Sciences. In the plethora of remedies claiming science support, it is critical to tightly link the research evidence to the intervention. For example, in this year’s exploding brain fitness market, there is much claim of scientific support but little published clinical trial evidence.

Health social networks
Another VC play is health social networks (for example, PatientsLikeMe, CureTogether, DailyStrength, HealthChapter, Experience Project and peoplejam). Not only can patients connect and generate group-synthesized, curated and moderated knowledge, but health social networks can also facilitate the development of personalized medicine by being a repository for the quantitative data of genomics, ongoing biomarker measurements and electronic healthcare records. Big pharma can approach patient communities for field studies and clinical trials.

Longevity treatment delivery
Standardized longevity treatments and delivery programs via private clinics are not a traditional VC play, but some interesting 10x business models may be possible. In the several years before longevity treatments are more proven and automatically administered via traditional healthcare channels, these services can be provided by private clinics as they are now.

What would improve the longevity treatment market is standardization; standardization of doctor qualifications, certifications, validations, services and treatments, and treatments supported by scientific research clearly evidenced to consumers. Currently, longevity doctors offer heterogeneous suites of services which is challenging for consumers to parse. Positioned appropriately, there is more than adequate demand despite the current lack of insurance reimbursement. Since longevity treatments are currently outside the purview of traditional medicine, third party certification (for example led by the Methuselah Foundation) could help validate doctors and treatment programs, and contribute to industry standards.