D&MD:
What inspired you to set up Oxford BioMedica?
AK: BioMedica was originally set up in 1996 as a spin-out
from my laboratory at the University (of Oxford). For many years in fact,
my wife and I ran one of the biggest molecular biology laboratories in the
country. We were there for the best part of 17-18 years, and, during that
time, we worked mainly on gene expression and on virus structure. These
two fields have really come together very nicely.
The first gene-therapy companies were founded in the US in the very
late '80s, early '90s, and they took laboratory technology for getting
genes in cells and try them in the clinic to see if they would work. It
was a perfectly reasonable thing to do, but it didn't work.
We had observed that from our university setting and we had technology
in the lab at that time that we felt would go some way to solving some of
the problems. We put a patent portfolio together and, originally, we
thought that we would sell that patent portfolio out of the university
into some company. That was around 1995, although it was based on work
that we'd been doing for some ten years.
But as we put the portfolio together, it got more and more exciting and
more and more interesting. We'd had a lot to do with the pharmaceutical
industry over the years—we'd filed a lot of patents and transferred a
lot of technology—and this portfolio was very exciting, so we thought
that maybe this time we had the basis for a new company.
During '96, we looked around for funding. It was during '96 really that
the Alternative Investment Market (AIM) got going—the junior market at
the London Stock Exchange (LSE)—and I started talking to people about
maybe taking BioMedica straight to AIM, because in a sense we'd done a lot
of "blue-sky" research and we were now getting into a
product-development phase. So we felt it was reasonable to go to AIM and
we found a broker who would sponsor us- so that's what we did. In December
'96, we raised £5 million ($7.2 million) and BioMedica was then listed on
the AIM. We'd done a little seed financing in the previous August, really
just to raise enough money to finance the preliminaries to AIM. But it was
and unusual way to start, and the VCs (venture capitalists) didn't like it
because we'd cut them out of the action.
The problem was that, of course, '96 was a very bullish year for the
biotech market and '97 was quite the reverse., and we found ourselves
being a very new company on the complicated side of biotech—complicated
for investors anyway—and we had the British Biotech falling to pieces
down the road. To cut a long story short, we went through another five
rounds of financing between then and last year.
Those financings got more and more successful as we went on, and then
... pretty much at this time last year ... we had a £35.5 million ($51
million) round, which was the largest amount of money we'd ever raised,
and we moved from AIM to the LSE. In order to qualify for that, we had to
have two products in the clinic, which we did—we had a number of
partnerships in place—and the company then started to look really quite
successful.
Now, we're a year away from that. We've got quite a lot of money in the
bank. We've just got some fascinating clinical results from two lead
cancer products—certainly worth further investment—and we are moving
on to develop our other major area of activity, which is neurodegenerative
disease and, for that, we have a product that is going before the US FDA
(Food and Drug Administration) in the next couple of months.
We've been here (Oxford Science Centre) all the time, and started off
with two floors, and now we have five floors, and we have about 80
employees in the company overall. And, just this last year, we have opened
up a wholly owned subsidiary in the States, in San Diego, and there are
about 13 people there at the moment and that's due to go up by the end of
the year.
D&MD: Why did you make that move?
AK: That's where all the action is. America is the major
market, or rather a major market, other than Europe, and most biotech
companies are based there, most pharmaceutical companies have major
operations in the US. Most of the science gets done there.
D&MD: The BT Vision research and awards program
described your research as visionary. In what sense would you say that
your research is visionary? From what you have said, gene-therapy research
had already started in the America, before your company.
AK: Maybe you should ask BT! I think the answer would be
in the way that we have done it, the way that we have made it work where
it hasn't been working before. Certainly, what we've done is to take a
fresh look at the challenge of gene therapy. Gene therapy is widely
recognized by the technical community as the next major revolution in
medicine. None of us has any doubts about that—in much the same way as,
in the early days of antibodies, there was no doubt that antibodies would
be a medical product, but it took a while to work out the technology. It's
the same for gene therapy. I think that what we've done is to bring an
element of clinical reality to the field that wasn't there before. Not
only have we done that, but we've also taken the core technology of gene
therapy and we've applied it in series of ways that haven't been done
before.
D&MD: Was there an effect on Oxford BioMedica's
development due to the death of an 18-year-old patient, Jesse Gelsinger,
in the US in September 1999?
AK: It set us back, but only for a very short time.
Basically, it caused us to take a closer look at our procedures here, but
it's now back on track. They've perhaps been a little more careful, but
we've always been very careful here in the UK. There was no amendment made
to the UK regulations. In the States, they've tried to be a little bit
more careful.
Really, most people recognized that Jesse Gelsinger should never have
been recruited into that trial. If you take a patient who's allergic to
aspirin and give him aspirin, he'll get very ill. Drugs, or most drugs,
will have some segment of the population that cannot receive them. That's
a slight oversimplification, but the fact of the matter is Jesse
Gelsinger's death was not a sign that gene therapy is dangerous. But
clinicians need to be very careful about patient recruitment in the
management of their trials.
The other thing to say is that gene therapy is a big field that
encompasses a very large number of technologies, all of which use gene
directly as a therapeutic agent, and there are many different ways of
delivering those genes, there are many different types of gene, and many
different ways of making those genes work. It's rather like small-molecule
drugs—a big umbrella title, but there are many different types doing
many different things. Depending on the strategy that you're using, the
technologies that you're using, there is more, or less, risk. The
technology that was used in the Jesse Gelsinger case I would class as at
the most hazardous end of the spectrum of technologies. In BioMedica, we
don't go near that particular field of technology. As I said earlier,
perhaps one of the things we've brought is a better technical rationale to
the product-development program. I would include the consideration of the
safety profile of various delivery technologies as an element in that.
To be absolutely fair, we do not work with the particular delivery
technology that was used in that case. But there are several perfectly
good companies that do, and every one of those companies has taken that
technology into clinical trials through the perfectly correct regulatory
processes, had them quite properly agreed, and have gone into clinical
trials that have not resulted in deaths. The other side of that is that,
if you look at the role of the technologies that are used to deliver genes
to patients, then the one that was used in that case I would class as
being at the more dangerous end. But, nevertheless, there are many drugs
on the market that are dangerous, but we manage the danger. And I think
that what happened in that trial is that the danger was not properly
managed.
D&MD: In terms of your technology, are there any
particular regulatory barriers that your products have to overcome that,
for example, small-molecule drugs do not?
AK: Not really, other than that we are in a new field, a
novel field, and regulators are always a tad more cautious, and are going
through their own learning process. So, for example, we take part in MCA
(UK Medicines Control Agency) meetings to consider new policies for
approving these entirely new products that we're developing. We do the
same with the FDA and take part in international meetings. I don't think
that we face any more of a barrier than any other new field would have.
In the United States, the regulatory process is managed entirely by the
FDA. In England, whereas normally things are regulated by the MCA alone,
anything that is gene therapy also has to go through GTAC, which is the
Gene Therapy Advisory Committee. We have never experienced GTAC slowing us
down. They are a very good group—very pragmatic—and we have an
excellent working relationship with them. And their existence is not a
function of anybody saying that there are special dangers in gene therapy.
I think that they're simply saying "It is a new field and we need to
have that extra bit of caution."
D&MD: And at the European level, is there an extra
layer?
AK: No more than for any other drug product.
D&MD: Aren't some European countries more cautious
about gene therapy than the UK?
AK: I think that you are absolutely right.
D&MD: You mentioned that you had some exciting
results coming along. I don't know how much you're allowed to say at this
stage before publication.
AK: We are in Phase I/II with two products, called MetXia
and TroVax. As all Phase I/II studies, they are primarily aimed at safety,
with some additional technical assessment for MetXia, for example, that
measured the efficiency of gene transfer to the tumor. With TroVax, the
idea, in addition to safety, was to look for an immune response in terms
of the tumor protein in the product. These were the kinds of things that
were the subject of those trials.
As far as the primary, official goals were concerned, both trials were
completely successful. There were no adverse effects. There was gene
transfer in the case of MetXia and an immune response in TroVax.
On top of that, the clinicians observed the patients, and both products
provided clinical benefit to patients. The statistics are not good, simply
because, in a Phase I study, of the numbers (of patients).
Those results are documented in the annual report ... so there is
really a nice up-to-date description of the company's progress. Also, the
products are reasonably well described on the Web
site.
We are now seeking partners to help with the development of those
products
D&MD: I understand that pharmaceutical companies are
very keen to add products to their pipelines at present, but would you not
be better off retaining these products and taking them further yourself?
AK: That's absolutely right, particularly of TroVax,
which is so good that we should probably add a bit more value to it.
There's a balance to be struck. We've got more stuff coming along in the
pipeline, too much really for us to do. And, with share prices being so
depressed at the moment on the market, we need to bring in more market
capital so that we can engage in a bit of M&A (mergers and
acquisition) activity, so we need to get that market cap up a little.
Then we have a number of alliances—with Aventis, with Amersham, and a
very large one with American Home Products (now Wyeth), where we are
taking an antibody that we own and are working with them in their
immunotoxins program. There's been a reasonable amount of commercial
credibility generated.
D&MD: What about the other track that you're going
down—that of drug development?
AK: It's a microgenomics activity, really, involving gene
discovery and target identification. That is much newer. We've only been
doing that for about a year.
The idea really is to say: "The genomics industry and the
proteomics industry as a whole have generated so much stuff that you could
almost take the view that it wasn't worth starting." If you generate
so much stuff, it's almost like generating nothing because you have
nothing to focus on.
Again, using our ability to get genes into cells, we took an approach
that said: "Well, rather than look at everything that gets switched
on in a cancer cell, let's see if we can manipulate cancer cells using a
range of different systems and see if we can engineer them to bias what
happens to the cells." The idea is that, in any given process, there
are a number of pathways that are going on that lead to the manifestation
of disease. And, generally what people do is they try to find everything,
all the things that are going on. What we say is: "Well, OK, take one
little bit, and we know this is an important piece in the process—say,
in tumors growing blood vessels—and what we're going to do is to find
all the things that are related to that event." We manipulate the
activities in that event by putting a particular gene in a cell type that
we're interested in. That has the result of activating all of the other
genes that are in that one pathway. What we are going to look for then are
just those genes that are in that pathway. This is a focused approach,
based on the genetic manipulation of cells.
The analogy we use is the "Internet search," where most of
the industry uses a low-tech comparison search for things with one key
word and getting thousands of results or hits, and most of them are crap.
Our approach is more like doing a search where you put in lots of key
words and all the Boolean connectors in, so you really restrict it to
finding stuff. You still don't know what you're going to find, but you
have put what you're going to find into some finite barriers. Then, you
get fewer hits, but more of them are what you want.
That's the idea—and it's working. We are finding drug targets that
people would not find by a conventional approach. We've done side-by-side
comparisons and we know absolutely that if you just do the standard things
that the proteomics and genomics boys do, you would not find what we're
finding.
D&MD: That sounds like the approach that Leroy Hood,
founder of the Institute for Systems Biology, advocates, whereby, to find
out how a system works, you introduce small perturbations and observe
their effects.
AK: Yes, I do know about that, but they're doing it more
on the bioinformatics front—an in-silico activity—whereas we're
actually doing it with cells in a dish. The primary cells are for example,
macrophages in a tumor. If a tumor starts growing in your body, it will
die without a supply of blood. The macrophage is part of the body's
defense process, but the problem with it is that, in that situation, the
macrophage, because they think that the tumor is a wound and it needs
healing, and hence a blood supply, the macrophage send out signals that
say "Grow blood cells here!" Now, if you can stop that
process—and there are some attempts to do that at present, but they're
not working very well—but, if you can stop it, then you've got a tumor
therapy. So we take primary tumor macrophage—not cell lines—these are
fresh, primary macrophage, taken from people, and we put a gene into the
macrophage and selectively amplify anything that comes along in that
particular environment, which is actually low oxygen—and we've got
things that are pro-antigenic all the time.
That's all based on our ability to get genes into cells. BioMedica is
absolutely in the top league in terms of our ability to deliver genes into
cells.
D&MD: Are there any ethical issues that concern you
in relation to gene therapy?.
AK: Well, I concern myself with them largely because the
regulators ask me to concern myself. From my own personal point of view,
there's very little ethical concern when one's developing a product that
might save the life of a terminally ill cancer patient for another couple
of years. You can imagine the scenario where a parent of young children
has cancer and you can prolong the parent's life for their children for
another two years. It's very hard to then worry about whether or not you
should be delivering genes into a cancer patient when you're seeking to
achieve that result.
If I was delivering genes in a patient to provide hormone-replacement
therapy, I still think that the benefit to the patient would far outweigh
any concern about ethics. The big concern that the regulatory authorities
impose on us, and this is probably right, is that they ask us to test,
quite rigorously, whether there is any chance of the genes in our gene
therapy ending up in the germ cell. Then, of course, you would be
permanently modifying a line of human beings—and that is something you
would worry about, ethically. It is also worrying from the point of view
of the adverse effects on people down the line, because if I liberate a
gene into a patient that leads to cell death, that gene is largely
restricted to the tumor, and we know that. However, if a tiny bit of that
gene product ends up in the germ cell, and it would only be a fraction,
the problem that you would have with anybody inheriting that gene would be
that the gene would then be in every single cell in their bodies. And that
may have some adverse effect on them.
But the notion that it is somehow wrong to modify people is a difficult
issue. I've been to a gene-therapy meeting where interest groups have been
present—people representing cystic fibrosis patients ... or sickle-cell
anemia—and they're crying out for germ-cell modification because they
have families where you have children who are carriers of these horrendous
diseases. They'd love to have the situation where you can modify the germ
line and get rid of the disease from their family. I suspect that
germ-line modification will come in the future. But I think that it will
only come if we have lived with gene therapy out there in the population
for a few years.
D&MD: There was a high-profile case recently at the
Institute of Child Health, where they announced that a child had been
cured of a fatal genetic condition, X-SCID, by gene therapy.
AK: That was Adrian Thrasher. We work with Adrian. That
was a nice result—a nice indication of gene therapy working.
D&MD: How did it come about that he could produce a
result with gene therapy now, whereas your products still seem to be at a
much earlier stage?.
AK: That's a fair question. It's purely a function of the
nature of the disease. Some of these very rare, specific, inherited
diseases—and this one in particular is arguably the easiest thing to
treat with gene therapy. I could explain that, but, basically, it's down
to the properties of the disease and the biology of the system. It's a
great result and I don't want to put it down at all—it was lovely to see
his smiles—but it was the easiest disease to treat. There's only a dozen
or so people on the planet with that disease. So, for a company, this is
not really a viable target. Most of us in the industry are trying to
achieve much larger targets and vastly more complicated diseases—and
that's why we're behind.
D&MD: Having achieved that success, has that helped
your company?.
AK: Yes, we're making good use of it. Also, we're working
with Adrian on related diseases that are not quite so easy to deal with.
If we're successful they open up a way to treat a range of blood
disorders, like sickle-cell anemia.
D&MD: Despite the success that your company has been
having in developing its products, your share price has drifted downwards
since your launch on the London Stock Exchange. Is that the fault of the
Stock Exchange?.
AK: No. We've got comparative charts, which we did for
our Annual Meeting ... and everything's gone down, and we're in the
middle. We get hit a bit more one week than another and then we come up a
bit, but we've gone down with market sentiment.
We are being successful, but we are at a comparatively early stage,
and, at the moment, the investment community does not want to know about
anything that is not generating a major amount of revenue. Well, we are
not really at the revenue-generation stage in any big way.
Even some of the companies that have been extraordinarily successful
over the years, like CAT (Cambridge Antibody Technology) or Celltech, have
been hit hard as well. So the market is appalling at the moment. They have
lost so much money that people are beating them around the head and they
have lost jobs like crazy, so it's just a mess. It's just a matter at the
moment of getting on with what you believe in and waiting for it to pick
up.
D&MD: In terms of finance, how long could your
company keep going with its present finances, or is it not a case of that?
AK: It's a perfectly reasonable question. If we didn't
get a penny from any other source, if we didn't generate any revenue from
now on, we'd run out of money in the middle of 2004. That's not bad. It's
the longest we've ever had.
D&MD: Do you have a sense of when the company might
move into profit?
AK: It's reasonable to expect that we might become
profitable within the next few years. The problem is that it depends what
you mean by profitable. As I'm sure you're aware, biotech deals are done,
so that, if you're a fair way from the market, as we are, you generally
get modest up-front payments—a few hundreds of thousands of dollars,
maybe a million—as the product moves closer to the market, you get
larger payments. And, once it reaches the market, then you get royalties.
So, you can become profitable in one year as a result of two or three
milestones happening to crystallize in that one year—and then the next
year you might be making a loss again. It's only when the profit gets into
the market phase that you have a favorable, sustainable revenue stream.
That's why we're vague about when we might become profitable, because it
depends what you mean—whether it's sustainable or transient. What we
have in place are prospects for substantial revenue over the next few
years.
D&MD: Do you have a sense of which of the big pharma
companies are really keen on gene therapy and see it as a major business
prospect for the future?.
AK: Yes, we do. They tend to come and go. We find that
pharma companies change their policies very frequently. One of the most
interesting things, I think, is just how seriously some of the mid-tier or
high-value biotech companies are taking it. That was quite exciting from
our point of view because these companies are easy to work with because
they still have the biotech mentality and flexibility, that the very large
companies tend not to have. However, we have significant interest in our
new products from very major pharmaceutical companies—I'm not going to
name them. Evidence of that is the $24 million deal that we did with
American Home Products early last year.
D&MD: You've been running the company for eight
years. Is it a challenge that you've enjoyed?.
AK: Yes. When I left the university, I went to resign,
but they gave me leave of absence for five years. I didn't ask for that.
Formally, I can go back in October 2003, but ...
Although I was a successful academic for years, I had a lot to do with
the pharmaceutical industry. I was bringing in over £1 million ($1.5
million) a year in grant money—half of that came from the industry. Even
in 1981, I transferred intellectual property to Celltech in their early
years. I worked for Glaxo over the years, Amersham, and for British
Biotech even, for a while. I was an expert witness in intellectual
property cases over the years. I had a lot to do with the industry. It was
almost a case of getting a bit jaded with the academic treadmill, but also
with the fact that I'd transferred a lot of technology, and I'd always
advocated the responsibility that academics had for their own technology.
The fact that the UK lost monoclonal antibodies seemed absolutely
outrageous. A lot of people blamed various government agencies, but the
primary responsibility lay with the inventor, who may not be a
businessman, but if he doesn't know how his technology might be use, who
the hell else is? So, when we had this portfolio of technology, I thought
I'd better get out there and do it—so I did.
