As it turned out, the missing technology pieces were about to be developed at Millenium Pharmaceuticals in Cambridge, Massachusetts.
Two of Gene Logic's top scientists—Louis Tartaglia, senior vice president and general manager, drug positioning and selection,
and Thomas Barnes, vice president, genomic pharmacology—were working at Millennium at that time. And although the two men
had never met, each began speaking with former Millennium CEO Mark Levin about using the company's genomics technology to
begin a drug-repositioning business. Levin introduced the two men and revealed that Millennium was planning to concentrate
on drug development and shut down much of its technology business, including the gene annotation technologies that Tartaglia
and Barnes needed. He suggested that the two scientists form a team of technology specialists and develop a business model
for a new company. "We began incubating and developing the technologies," Tartaglia says. "What Tom and I had to do with the
team was to adapt these mature technologies so that they could now identify the function of compounds. They had to be more
compound centered for compound-annotation purposes as opposed to gene-annotation purposes."
In late 2003, when Barnes and Tartaglia were making the rounds of venture capitalists to fund a spin-off company, they met
Mark Gessler, the new CEO. In 2004, Gene Logic purchased the new drug-rescue unit from Millennium, and launched what it calls
the Drug Repositioning and Selection program (DRS) in Cambridge, where the Millenium unit had been based. Barnes never even
moved his office.
Today, Gene Logic's DRS unit resembles a warren of laboratories, where teams examine compounds using not only genomics technology,
but a range of investigation techniques from molecular pharmacology to liquid chromatography-mass spectrometry, even in silico
biology and in vivo real-time animal imaging. However, no "hit" on any one of these approaches is sufficient in itself for a new indication hypothesis.
The heads of various departments meet every week to discuss the reactivity of compounds and refine the experimental designs
needed to achieve a testable hypothesis for a new drug indication.
If a compound does prove to be biologically active, Gene Logic and the compound's owner work together to develop an animal
model to validate the new therapeutic concept. "Gene Logic develops a rationale for repositioning one of these drugs for different
indications," says Roche's Babbis. "That is step one. In step two, a panel of individuals from both companies will get together,
review that data, and determine what are the appropriate in vivo disease models that could be utilized to validate their concept."
Once the outcome of that model is known, in the Roche deal at least, the compound's parent makes the final decision. And at
that point they have several ways to move forward, according to Babbis. The company can pay a milestone as they would with
any in-licensed compound at that stage, or they can turn over the rights to Gene Logic in return for milestones and royalties
if Gene Logic successfully develops it. The latter model might come into play if Gene Logic is convinced of efficacy and Roche
is not, for instance. But in either case, Gene Logic parlays a hypothesis and proof-of-concept trial into an equity stake
in a drug candidate.
No VP of Dead Drugs
In reality, decisions about who controls development of the drug may depend on more than data. "You have to think about what
the return on investment is," says Frank Douglas, former head of R&D at Aventis and a Gene Logic board member. (See "First
Responder"). "It depends on what you find. What you find may not be interesting [for a big company], but it may be interesting
for some small company for whom $200 million is a huge payoff—and patients will benefit." That said, Douglas is convinced
that Gene Logic is better off partnering with large pharmaceutical companies at this early stage, since no one knows what
therapeutic area the new indications will fall into, and big companies are likely to have the expertise and resources to design
a wide variety of clinical trials.