This approach appears to make sense to Big Pharma. Some of the industry's major players have signed on to let Gene Logic seek
new targets for their discontinued drugs. Millennium Pharmaceuticals, Pfizer, Roche, and one Japanese company, which Gene
Logic declines to name, have inked repositioning deals. Gene Logic is currently seeking new targets for more than 30 discontinued
drugs. They are in "animal model validation or partner evaluation discussions" for six of the compounds, according to their
2005 third-quarter financial statement.
"There is no way we can have a business plan like this without a pipeline crisis," Gessler says. "Ten years ago, none of the
big companies would have listened to our pitch." Gene Logic also benefited from strong prior relationships with some of these
companies. Roche, for instance, had used the company's toxicogenomics services before hearing the drug repositioning pitch,
says Lee Babbis, Roche's vice president of preclinical R&D.
"There are many companies out there that are desperate to get compounds from pharmaceutical companies," says Babbis, the Roche
executive charged with administering discontinued drugs. Most companies that want to license new compounds from Big Pharma
seek drugs that are early in development, Babbis says. "But Gene Logic's twist was a little bit unique. They wanted compounds
that had been in the clinic and had not reached their clinical endpoint, but up until that point had shown no signs of overt
toxicity that would have led to a decision to terminate the compound."
In fact, a clean safety record is the only desideratum Gessler mentions when it comes to choosing compounds. The company does
not care, at least officially, what target the drug was originally developed for. If it was proven safe, they are eager to
see if it will engage one of their laboratory's growing list of disease targets. What matters is the drug's current activity.
Its past is unimportant. Almost all compounds that interest Gene Logic were discontinued in Phase II or III—but to get paid,
the company will have to return one to the pipeline.
"There are milestones and royalties attached to these drugs when they actually go back into pharma," says Joanne Smith-Farrell,
Gene Logic's vice president for corporate development and strategy. "So the idea is really a partnership. Pharma is contributing
chemical matter to the partnership, and they retain ownership of that. We are contributing the ability to actually provide
a commercial path forward and a development path forward." But if the screening efforts fail, as they are sure to do more
often than not, Gene Logic bears all the risk—at least in early deals with Big Pharma.
Seeds of Change
The drug repositioning unit is the newest division of Gene Logic, but it stands on the shoulders of genomics and other technologies
that have matured for more than a decade. When Gene Logic was founded in 1994 as a specialized genomics company, it began
building technology to aid drug discovery and development. By combining detailed gene-expression models and informatics, the
company created customized databases that could be used to reveal drug activity in specific therapeutic areas, including heart
and kidney diseases, osteoporosis, inflammation, psychiatric disorders, diabetes, and other diseases. This work was advanced
by the acquisition in 1998 of Oncomed, a company with expertise in tissue handling and microarrays, which are tools to determine
how genes interact, including how the cell regulates large numbers of genes at the same time. These new technologies were
interwoven with Gene Logic's existing systems to help clients see how new compounds changed the expression of genes and, equally
important, how they affected biological pathways involved in some 400 disease indications.
"We started being able to understand certain effects of drugs across a wide range of tissue samples in addition to the target
organ," remembers Gessler. It was this sort of data, suggesting unanticipated drug activity, that first spurred Gessler and
Doug Dolginow, the head of the pharmacogenomics group, to think about how to find new uses for drugs. But even at this point,
in late 1999 and 2000, the company lacked crucial pieces of technology. Gessler describes what they had then as "slivers"
of information. They saw enough to convince themselves that they were onto something, but not enough to take proposals to
a client company.