More MS news articles for Oct 2001

The Biotech Boom: Revenge of the neurons

October 12, 2001
By Stephan Herrera
Red Herring
This article is from the October 1, 2001, issue of Red Herring magazine.

Brain disorders don't have the same media cachet and pop culture pathos as cancer, but they represent a far larger drain on society and the economy. In the United States, somewhere between 5 million and 6 million people have cancer, which saddles the economy with an estimated $107 billion in annual health care costs and lost productivity due to illness and death. Meanwhile, central nervous system (CNS) disorders, which range from depression to Alzheimer's disease, afflict tens of millions of people in the United States and cost the U.S. economy $600 billion a year.

The worldwide market for drugs that target CNS disorders is $37 billion, according to IMS Health, a health-care consultancy. Only cardiovascular drugs -- with sales of $43 billion -- represent a larger market. But with a growth rate of 20 percent per year, CNS represents the fastest-growing category of prescription drugs in the world. Investors are taking notice. Venture capitalists have plowed $240 million into this category in the last 12 months, twice the amount invested a year earlier.

Why the sudden interest in CNS drugs? The dirty little secret is that first-generation CNS drugs are flawed, and yet still earn billions of dollars for their makers. The drugs are merely palliatives, meaning they treat only symptoms; they do not slow or reverse the progression of disease. They also come with side effects ranging from hallucinations and blackouts to death. Second-generation drugs, which are still in various stages of clinical trials, represent a small leap forward, but nobody is expecting anything capable of reversing the course of brain diseases. The best hope for disease treatment lies instead with a third generation of therapeutic drugs still largely in the early stages of development. Simply put, so little is known about brain disorders that drugs capable of producing any therapeutic result have yet to be found.

The rival approaches of two upstarts located only two miles down the road from each other in San Diego could help all that. Known loosely as the amyloid and mitochondrial-dysfunction approaches (for the proteins and organelles they involve, respectively), early studies indicate that they might slow or block the brain-cell death that is the hallmark of most brain disorders. Both amyloid deposits and mitochondrial breakdowns are present in a great many CNS disorders, leading some researchers to characterize the rivalry between these approaches as a chicken-and-egg situation. "Contrary to what each side thinks, we really don't know yet which one comes first," says Mark Smith, an associate professor of pathology at Case Western Reserve University.

Although there are other promising approaches to treating CNS disorders, for the better part of two decades, the amyloid approach has been the major preoccupation of neuroscience. A small army of amyloid researchers and biotech firms, which have raised millions of dollars on the premise that there is no better approach, have devoted themselves to the effort -- with promising results. Meanwhile, efforts to explain the role mitochondria might play in these maladies are relatively young. "Is there even a single mitochondria drug in animal models yet?" asks Gönül Veliçelebi, vice president of biology and genomics at the privately held Neurogenetics, which is developing drugs based on the amyloid platform. The company isn't even a year old, and already it has raised $17 million from Alta Partners, Advent International, Novartis Venture Fund, and SR One (GlaxoSmithKline's venture arm), and it is partnering with Eisai, the Japanese drug giant that makes Aricept, one of the first Alzheimer's drugs on the market.

Taking the other approach is MitoKor, a startup using mitochondria research to develop drugs for diseases of aging, like stroke, amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease), and Alzheimer's disease. Aside from competition from the likes of Neurogenetics, MitoKor's chief obstacle is medicine's time-honored tradition of dismissing every new approach until it becomes obvious that the method in question will attract funding. "This mitochondrial approach is new and threatening to the CNS establishment," says James Dykens, associate director of business development at MitoKor. The four-year-old company, however, is winning converts. It has raised $50 million from VC firms like Alta Partners, Domain Associates, MDS Capital (Toronto), and Forward Ventures, and it is collaborating with Pfizer (NYSE: PFE) on research.

For both companies -- and their divergent approaches -- the stakes are enormous. Three of the world's top-ten selling drugs -- Prozac, Zoloft, and Paxil -- are for CNS disorders, and together hauled in $6 billion is sales last year. It's easy to imagine a drug for Alzheimer's or Parkinson's diseases bringing in similar revenue.

If early laboratory success with these two competing approaches translates into definitive clinical results, they will have a dramatic effect. They would radically change the way CNS disorders are treated and, quite possibly, redirect billions of research and investment dollars that have been primarily chasing new versions of first-generation CNS drugs.


Broadly speaking, CNS disorders fall into two camps: psychiatric and neurodegenerative. Psychiatric maladies include depression, bipolar disorder, schizophrenia, and myriad anxiety disorders. Neurodegenerative diseases include ALS and Alzheimer's, Parkinson's, and Huntington's diseases. Stroke, brain cancer, head trauma, migraines, and spinal cord injuries also fall within the CNS realm.

CNS disorders are especially vexing because unlike, say, cancer, their incidence rates are not dropping, and they do not typically kill their victims. Instead, the disorders render people profoundly and progressively disabled for the rest of their lives. For example, most people do not die from the onset of Parkinson's disease or stroke. Over time, however, they can't work or care for themselves.

Unfortunately, today's drugs are of little help. A person with a CNS disorder will spend the rest of his life on an ever-changing cocktail of prescription drugs. And because eventually his body develops drug tolerance, he will require ever-increasing dosages to get the same relief.

CNS disorders have been such a hard medical nut to crack because, with the brain, nothing is straightforward. Take, for example, tissue samples for biopsies, which are the cornerstone of diagnosis. You can't scrape or cut away tissue from the brain -- at least not from one that happens to be nestled inside the skull of a living patient. And even if brain diagnostics were not so problematic, there is the physio-biochemical challenge of getting a drug into the brain.

The brain is protected by a layer of enmeshed cells, the blood-brain barrier, which is designed to keep out uninvited visitors like, for example, a blood-borne virus that could loose a disease on the defenseless brain. In the mid-'90s, however, a technique to breach the barrier with small molecules was developed, but the ensuing drug-delivery technologies are still in the early stages of development. But diagnosing disease and delivering a potential cure remain moot points if doctors don't know what they're looking for.


A mitochondrion is a bean-shaped organelle that resides in the cytoplasm of every cell. One of the more unsung heroes of cellular life, mitochondria use electron transport and fatty-acid metabolism to provide energy for cells. In 1998, an ALS study conducted at the University of Massachusetts Medical School found that free radicals -- the highly toxic and reactive oxygen molecules that injure cell structure -- and mitochondrial failure in motor neurons occur just before the disease's symptoms arise. Other researchers studying the enterprising organelle went on to discover that in 95 percent of the cases of stroke, Alzheimer's disease, and ALS, there are elevated levels of free radicals and crashed mitochondria. Skeptics -- and there are many -- say that's correlation, not causation.

The advantage of potential drugs from MitoKor that target the mitochondria of brain cells is that a single compound might be effective in treating several different CNS disorders. The downside is that they may never cure the patient. Mitochondria-focused drugs "may delay the death of neurons, but they won't necessarily stop the disease process," says Mark Mattson, a senior investigator at the National Institutes of Health's National Institute on Aging.

Though it is still new and unproven, the mitochondrial-dysfunction method is the most theoretically robust approach. After all, mitochondrial failure is observed in everything from stroke to ALS. It stands to reason that MitoKor has a valid approach to these disorders by focusing on developing a drug that repairs and restores mitochondrial function.


In the medical field, proteins, even pieces of protein known as amyloids, make for more easily validated drug targets than do complex organelles, like mitochondria. Amyloid is protein-based debris that is the by-product of a larger protein called amyloid-precursor protein. Like cholesterol in arteries, when amyloid is produced in excess, it becomes a problem. When this sticky substance accumulates in brain cells, it can destroy them. Excess amyloid also fosters the production of excess free radicals that can cause inflammation in the brain, a condition that can eventually be fatal. Cell mutations that produce amyloid deposits, however, account for only 5 to 10 percent of Alzheimer's cases. Nonetheless, the neuroscience establishment is keen on the amyloid approach and skeptical of the mitochondrial one.

"If a company has already invested a lot of money on amyloid, they're not going to bail if they are just on the edge of finding out whether that research will pan out," says Mr. Dykens of MitoKor. "The mitochondrial approach is not new, but it's finally coming to the fore now."

Mr. Dykens has the lonely task of playing mitochondria ambassador to the CNS and investment communities. At a neuroscience conference at Princeton University in July, Mr. Dykens said he felt his message was finally starting to get through. "Once again, I was the token amyloid contrarian at the meeting, but for the first time, I really came away thinking that when folks are honest with themselves and divested from their own long-term interests, they see what we see: a powerful approach," he says.

Powerful indeed, if one considers that the advance of neurodegenerative disorders is the result of dying neurons. What causes brain cells to die is still a mystery, but it is well-known that mitochondria play a role in the aging of cells and ultimately in apoptosis, or cell death. Also, mitochondria serve as the main site for the production of free radicals. Any abnormality that interferes with the cell's normal production or purging of free radicals can cause the mitochondrial damage that leads to cell death, too.

"Within the mitochondria there are many of the messengers that induce apoptosis," says Doug Turnbull, a medical doctor and professor of neuroscience at the University of Newcastle Medical School in the United Kingdom.

Preclinical studies in cell culture and animal models indicate that drugs that stabilize mitochondrial health and function can prevent neuronal death. Dr. Turnbull's specific clinical interest is in patients with primary mitochondrial disease. Relatively rare and incurable, there are more than 50 known diseases that result from mutations or deletions of the mitochondrial DNA. "In these patients, we see prominent neurological problems associated with neuronal cell loss," he says. "So I can see many reasons why it might be good to target mitochondria."


Amyloidosis is a class of diseases characterized by a buildup of amyloid proteins. The methods that best represent the amyloid-based approach to CNS disorders are amyloid vaccines and treatments based on drugs that might inhibit secretases, which are enzymes that are produced inside brain cells.

Among the more visible proponents of targeting amyloids to combat CNS disorders is Rudolf Tanzi, a neurologist at Massachusetts General-Harvard Medical School. He has helped launch two startups focused on the amyloid hypothesis: Neurogenetics and Prana Biotechnology. He holds an equity stake in both but is clearly more excited about Neurogenetics, which is working on approaches to the amyloid problem and aims to have two drug compounds in preclinical studies sometime next year.

Neurogenetics' first approach focuses on the biological pathways that control calcium flux into and out of brain cells. When this ebb and flow malfunctions, beta amyloid accumulates in the cell. The other approach is focused on finding a drug that binds to a multifunctional receptor involved with the production and breakdown of a-beta amyloid, a type of amyloid. In a cell with excess cholesterol buildup, there tends to be excess amyloid, too.

"There is one common event in Alzheimer's, at least, and that is the increased production of the amyloid a-beta 42," says Dr. Tanzi. "We don't know if amyloid deposits are the cause, only that they might make patients more susceptible to the disease, so if we could find a way either to stop the production of amyloid or at least dissolve it once it has accumulated, we just might be able to knock this disease back." The a-beta 42 is a target because it is the chief component in amyloid deposits. The goal is either to decrease its production or foster its breakdown.

"There's a lot of damage and debris in the brain of a CNS patient," says Dr. Veliçelebi of Neurogenetics, who was previously at MitoKor. "But we don't know what causes it or how it all got there."

Numerous other firms are working on variations of the same amyloid approach, including Durect (Nasdaq: DRRX), Idun Pharmaceuticals, MelTec, NeuroSearch, Praecis Pharmaceuticals (Nasdaq: PRCS), and Vertex Pharmaceuticals (Nasdaq: VRTX). Upcoming clinical trials based on Neurogenetics's amyloid approaches will be critical tests for the amyloid hypothesis. So far the correlation between malfunctioning amyloid and CNS disorders is holding up.


No wonder CNS researchers, usually a pessimistic lot, seem so hopeful all of a sudden. "In the next decade or two, we'll do for people with neurodegenerative and psychiatric diseases what we do for people with cholesterol and infectious diseases today," says Douglas Cole, who heads research and development at Vertex, a company that has drugs in preclinical trials for stroke and Alzheimer's disease. "There's reason to hope, but we're still in the early days of smart CNS therapies."

For his part, Mr. Dykens is also optimistic, not the least because MitoKor has two drugs in clinical trials that it hopes will improve mitochondrial function. The first drug is in Phase I for Parkinson's; the other drug, in Phase III, is a collaboration with American Home Products (NYSE: AHP) involving 7,000 women to see if the estrogen molecule might play a therapeutic role in improving mitochondrial function in Alzheimer's patients. The more developed drug is still at least four years from U.S. Food and Drug Administration approval and release as a commercial product.

Despite the heady cheer, Dr. Tanzi is quick to point out that drugs are just part of the puzzle. The molecular diagnostics for CNS disorders are still in their early stages, too, although genetic, genomic, and proteomic insights are providing a better understanding of the respective roles that family history, genes, and proteins play in CNS disorders. If the scientific challenge of making sense of those relationships is enormous, consider the societal challenge. "Besides lack of data, the issue of legal protection is one big unanswered question for me," says Dr. Tanzi. "Protection against genetic discrimination has to be firmly established before we can ever go forward with a definitive diagnostic test."

"Everybody is just going to have to be a little more patient," says Dr. Veliçelebi. "It won't be easy now that we're finally starting to see some fundamental progress after years of cranking out so much information that all added up to a whole lot of nothing."

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