NoCo fertile ground for biotech cos.

In Northern Colorado, all of the big elements necessary for growing a healthy biotechnology sector – a research university, government laboratories, habits of entrepreneurship, an energetic trade organization – are in place.

“Our goal is to grow the state’s biotech work force and to attract investment,´ said Denise Brown, executive director of the Colorado Bioscience Association. “We provide support for the small start-up companies that create high-paying jobs. Even if the companies are eventually bought out, the jobs stay. The entrepreneur then goes out and starts another company, continuing to create more jobs.”

Of the 168 companies statewide listed in the 2006-07 edition of Bioscience, 35 of them are in Northern Colorado. Of these, some names like Heska Corp. and Mycos Research LLC are familiar; other small, entrepreneurial operations have just begun to take root. InViragen LLC, RMC Biosciences Inc. and Aurogen Inc. are three whose names do not possess that familiar ring – just yet.

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Among the newest of the new biotech companies is InViragen, a company committed to creating vaccines to address infectious diseases, with a goal of improving global health.

“Vaccines are the most cost-effective prevention of disease,´ said Dan Stinchcomb, who with Jorge Osorio founded InViragen. “But they are expensive to develop, the demand is unsure and the liability is high. That’s why there are only a few vaccine producers in the world.”

Stinchcomb added that while up until now his kind of research has been funded largely by nonprofit organizations, in particular the Bill and Melinda Gates Foundation, a change may be occurring that coincides with the growth of the middle class in developing countries.

“In India, for example, there is a middle class of 300 million people who can afford to buy the vaccines,” he said. “Along with that fact, issues of bio-defense and avian flu have made the U.S. government pay attention to vaccines.”

InViragen’s lead vaccine is intended to protect against dengue (“bonebreak”) fever, a disease that affects 2.5 billion people in tropical regions throughout the world. It started in Southeast Asia but has migrated to Central and South America, and 10 to 15 million new cases are reported each year.

“Dengue fever also affects millions of travelers to those affected countries,” Stinchcomb said. “The travel market has the potential to make this vaccine profitable. There is also a market with the military.”

Stinchcomb explained that InViragen is licensing the vaccine for development from the Centers for Disease Control, which initially researched it.

“The CDC was just looking for someone to commercialize it,” he said. “We have gotten help from the (Technology) Incubator in Fort Collins, and we now have raised about $1 million in seed financing from investors and grants. We have a $660,000 two-year grant to work on plague and smallpox vaccines, and a two-year $210,000 grant for work on West Nile. The investment of $130,000 from private investors validates our business plan.”

The next step is to develop the vaccine for the developing world.

“Once we get into clinical trials, we will begin manufacturing,” he said. “We’re collaborating with Shanta Biotechnic in India. They will supply the clinical material. Then in Phase 3 of the project, we will move into multiple markets.”

Designer drugs

While Stinchcomb works in the material world of viruses and vaccines, Richard Casey, founder of RMC Biosciences, works in the virtual world of computer-aided drug design.

“I’m the owner,” he said. “I own it and run it. What I was interested in was combining the fields of high-performance technology and the biological sciences in order to use computer modeling in experimental work.”

He explained that most diseases are caused by defective proteins – and drugs bind to the proteins to either reactivate or deactivate them.

“We can model the 3D shape of the proteins and predict how they are going to bind,” he said. “I work back and forth with clients, screening their compounds against specific targets. A company in Moscow that is doing discovery and design has its own library of virtual compounds. What we hope to discover is a way to alter the shape of the defective protein. Then they will do the experiments.”

Virtual High-Throughput Screening, the method Casey uses to screen large virtual libraries, makes it possible to explore chemical space at a low cost.

“We have one of the largest small-molecule compound libraries in the biopharmaceutical industry,” he said. “It contains several million drug-like compounds that can be ‘matched’ with diseases like cancer and come up with promising leads. If a partner company and I can come up with interesting compounds, then we can license them.”

Bringing fields together

Licensing is the name of the game in biotech. Doug Ishii, who holds a joint appointment in the departments of biomedical sciences and biochemistry at Colorado State University, has licensed IGF – insulin-like growth hormone – to move it toward manufacturing. To this end, he founded Aurogen (a name drawn from Aurora, goddess of the dawn, and Au, the symbol for gold), which at the moment is a “virtual” company.

“The focus of our work is on the neurological disorders associated with diabetes and Alzheimer’s,” he said. “We discovered a hormone that is reduced in diabetes, and we think there is a connection with dementia. When you look into the histories of Alzheimer’s patients, you find that 80 percent of them had adult onset, Type II diabetes. Research is bringing these two separate fields together.”

Ishii noted that there are 12 million people with Alzheimer’s in the U.S., Japan and Europe, and that in the U.S. alone direct and indirect costs for treatment tops $100 billion per year.

“Those numbers will triple by 2050, putting a huge strain on health-care resources,” he said. “We already know IGF to be relatively safe; it is approved for children to promote growth of the body. But the (federal Food and Drug Administration) requires that you run clinical trials for each condition and that the manufacturing process be approved for each condition as well.”

If the drug proves effective, the implications for health are enormous. Current treatments for dementia have no effect on brain protein, and so the effects are transient.

“In rats, IGF prevents the loss of brain protein,” he said. “We think that an increase of IGF will improve learning and memory. Doing this work makes me feel good when I get up in the morning and go to work.”

Despite the promise in these enterprises, the risks are high.  For one thing, Colorado is barely on the radar screen for biotech. Massachusetts is one leader, and Washington State has devoted its entire tobacco settlement to biotech research.

The Colorado Commission on Higher Education has just allocated $6 million for a biotech manufacturing initiative. It’s a start.