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State's investment in Scripps Florida begins to pay off: Spinoff lab forms(South Florida Sun-Sentinel (KRT) Via Thomson Dialog NewsEdge) Jan. 6--Life science institute Scripps Florida has spawned its first private drug discovery firm, bringing together the lab expertise of its director of medicinal chemistry and the business acumen of the entrepreneur who helped found biotech behemoth Genzyme Corp. The new company, Xcovery Inc., which has an office in West Palm Beach, has licensed intellectual property developed in scientist Chris Liang's laboratory at Scripps in Jupiter and hopes to develop medications to combat inflammation and cancer. This first so-called spinoff begins to fulfill the promise of a biotech cluster of companies in South Florida that are expected to arise thanks to Scripps' presence in northern Palm Beach County. Coupled with a recent $100 million licensing deal with Pfizer Inc., the probability grows that Scripps will repay Florida the $310 million in state money used to lure the institute here. Financing for Xcovery is coming from Biocatalyst International and its chief executive, Sheridan Snyder, who in addition to Genzyme has founded 13 other companies. Snyder is prepared to pump as much as $1 million into the new company in its first year to determine the best drug candidates among Liang's discoveries. "This is typical of the kind of deals Scripps has done for decades in California, taking advantage of the scientific expertise of its faculty and translating laboratory discoveries into valuable assets," said Peter Policastro, senior director for business development at Scripps Florida. Although he would not disclose financial details, Policastro said the deal calls for an initial payment, milestone payments as potential drugs move closer to approval by the Food and Drug Administration and royalties should those drugs reach the market. Xcovery officials said the initial payment is in company stock. "It's a very exciting opportunity," Liang, 43, said in a telephone interview. For about 15 months, he and the nine members of his lab at Scripps worked on a project related to blocking the action of enzymes found on specific types of cells. Their goal was to seek possible treatments for inflammation, including rheumatoid arthritis and cancer. Liang's work is related to a new field of drug therapy called kinase targeting. About a dozen drugs using this technique have been approved in the past two years, and they have excited the medical community because side effects often are less serious than those of other treatments. The most notable drug in this class, Novartis' Gleevac, for chronic myeloid leukemia, had 2006 sales of more than $2.6 billion. "We're hoping to create the next generation of kinase inhibitors," said Tim Gallagher, Xcovery's chief operating officer. "And we're looking at a broad application such as rheumatoid arthritis or perhaps a specific cancer. The next year will focus on pre-clinical developing and determining the best applications for the technology." Liang, who holds more than 20 patents in drug discovery, was instrumental in the development of the drug Sutent, marketed by Pfizer, to treat kidney and stomach cancer. He will spend 40 percent of his time at Xcovery and the remainder at Scripps Florida in Jupiter. Should Xcovery's work produce a drug candidate, the company might need technical expertise and financing from a larger, more established firm. "We'll need a partner at some point, and we'll have to attract that partner with solid scientific data," Gallagher said. Creating its first spinoff company was the second major event for Scripps Florida in little more than a month. On Nov. 30, Scripps signed a five-year, $100 million deal with Pfizer Inc. to develop therapies for cancer, diabetes and mental illness. In addition to $100 million, the deal calls for Pfizer Global Research and Development to pay royalties to Scripps for drugs that reach the market. But the payoff for Pfizer and Xcovery will be a long way off. It can take 10 years or more from the time of discovery of a drug to approval by the FDA. Glenn Singer can be reached at [email protected] or 561-243-6612. INSIDE Cleveland Clinic is planning to build an outpatient center in West Palm Beach, joining Yale and Johns Hopkins Hospital in showing interest in the county. 1B Copyright (c) 2007, South Florida Sun-Sentinel Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |