Innovative drug research centre’s first private-sector project widens Xenon’s product pipeline

Every week Techvibes republished an article from Business in Vancouver newspaper.

This article was originally published in issue #1046 – Nov. 10 – 16, 2009.

After maintaining a low profile for much of its nearly five-year existence while it developed a business strategy and toiled in the lab, the Centre for Drug Research and Development (CDRD) has launched its first drug development project.

The CDRD’s commercial arm, Drug Development Inc. (DDI), is screening a series of compounds supplied by Vancouver’s Xenon Pharmaceuticals Inc. to determine if any have development and commercial potential.

The project is in the earliest stage of the biotech lifecycle and not valued in the multimillions, but it’s a milestone because it’s the centre’s first notable collaboration with the private sector.

The project is unique in that DDI is developing compounds provided by another research team rather than those provided by the CDRD, which is DDI’s primary role.

The CDRD has 20 research projects underway – which include everything from antimicrobial wound dressing to cancer treatments – and has formed a commercial advisory committee to rank what projects are most commercially viable.

Natalie Dakers, CDRD’s CEO, said the centre could spin out some of its research into DDI as early as next year.

Until then, the centre’s work with Xenon gets its foot in the door with the private sector, which DDI is courting to help advance its work.

The centre is in discussions with a number of pharmaceutical players, although Dakers wouldn’t disclose which.

One of the centre’s strongest relationships is with Pfizer Canada, which has provided $3 million of the roughly $75 million the centre has raised.

The CDRD is trying to fill a major funding and research gap in biotech that leaves many potentially useful drug assets orphaned and under-funded.

Its development model is found only in a few other North American facilities. It incubates early-stage technologies until they’re commercially viable and then passes the ones with the highest commercial potential on to DDI for further development and eventual commercialization, licensing or sale.

The crux of the partnership is the translational relationship between the two entities. Similar translational research labs tend to be either primarily academically or commercially driven.

Noted Dakers: “They don’t tend to take this hybrid approach.”

While the research being conducted for Xenon isn’t part of DDI’s primary mandate of advancing CDRD-borne projects, Dakers said that the project is important because DDI is assisting another member of B.C.’s biotech community.

But DDI will still need to advance its own research to the point where it’s attractive, from a licensing standpoint, to other drug developers.

“We as a centre for excellence, commercialization and research need to bring ourselves eventually to a place of sustainability, but that’s hard to do in [the biotech industry] in five years. It’s going to take us a lot longer than that.”

The CDRD is still refining its business plan and researching what products, therapies, illnesses and diseases it may target.

“Our business plan has been strong through this period of getting this organization up and running, but now that we have an understanding of what our business is, we need to be more strategic as to which direction we’re going to point this innovation engine.”

In partnering with DDI, Xenon has added another project to its broad pipeline.

Xenon’s philosophy is to reduce risk by maintaining a number of research programs.

“Betting everything on a single horse has never paid dividends in biotech,” said Simon Pimstone, Xenon’s president and CEO.

“[We] have to have breadth of pipeline because we know that things will fail and others will succeed.”

One way the company reduces its development costs is by partnering with commercial developers like Novartis AG (NYSE:NVS) and Merck & Co. Inc. (NYSE: MRK) and research teams like the CDRD.

Pimstone said the company could have proceeded with its newest program on its own, but partnering with the CDRD will accelerate the program’s progress.

Xenon also partnered with Genome BC last month in a $7.5 million project to investigate a small-molecule drug that could potentially treat patients that have excess iron in their blood. Toxic deposits of iron in major organs can lead to heart failure, diabetes and other serious conditions.

Genome BC is providing $2.5 million to Xenon, which is setting aside $5 million for the project and leading the research.