California Dreaming - Pharmaceutical Executive

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California Dreaming


Pharmaceutical Executive


Signals and Stem Cells

Drugs pulled from a dusty Big Pharma shelf may be efficient, but for many in San Diego, there's nothing to match the thrill of cutting-edge science.

Count in those ranks Alan Lewis, CEO of Novocell, a nine-year-old company dedicated to producing therapies derived from stem cells. Lewis is yet another biotech exec who traded a big title in Big Pharma for a more entrepreneurial life. A pharmacologist, he spent 15 years at Wyeth-Ayerst, the last six as vice president of research. It was a good job, he says, "But I realized that the exciting research wasn't being done in the pharmaceutical industry, [it was] in biotechnology."

He was offered a job in Boston, but turned it down. "It didn't have that entrepreneurial, California Gold Rush mentality." When a San Diego company called Signal Pharmaceuticals came calling, Lewis went from being a VP responsible for 500 people to a CEO in charge of ten.

"That was an immediate shock," he says. "I thought, 'Well, hell, I've got to raise money. And I've never done that before.' But the science—signaling, signal transduction, gene regulation—was exciting, and it was clear that Signal had some top-drawer scientific founders."

Six years later, in 2000 (the year of the genome bubble), Celgene made an offer that, given how far Signal had to go to reach profitability, was too good to refuse. The biotech went for $275 million, and Lewis stayed on to build Celgene's pipeline.

At Celgene, he got to dip his toe into one of the most exciting new technologies available: stem cells. "It was based on what they call umbilical or placental cells, which are fascinating," he says. "But I started to realize that the power of stem cells was not just in oncology, which is what Celgene was interested in, but it had lots of potential in other disease areas—diabetes, cardiovascular disease, CNS."

In 2006, Lewis got the chance to pursue that interest when he signed on as CEO of Novocell. By biotech standards, Novocell was a venerable old company, dating all the way back to 1999. It had sought a cure for diabetes, and in 2004 merged with two other small biotechs, CyThera and Bresagen, with the goal of creating an unlimited source of insulin-producing cells.

"If you're a Type 1 diabetic," Lewis explains, "Your pancreas, which is the source of your insulin and your insulin-producing cells, is unfortunately destroyed by the immune system. So we are trying to replace those cells with our stem cell–derived, insulin-producing cells. The interesting thing is, they don't need to be in the pancreas—they can be somewhere else."

The trick, he explains, is to ensure that the immune system doesn't kill new cells the way it killed the patient's original set. To protect the cells, Novocell uses a coating of polyethylene glycol (PEG). "It's permeable to things like oxygen, glucose, and nutrients," Lewis says. "And it allows the secretion of hormones. But it won't let immune cells, such as T-cells, get in."

Novocell has demonstrated, in animal studies, that encapsulated cells are protected from immune rejection after implantation—and can function and produce insulin in mice. It has also produced preliminary evidence of safety and function in a Phase I/II proof-of-principle trial in patients with Type-1 diabetes.

Those are noteworthy achievements, but they've taken nine years, and a marketable product is still ten years away, in Lewis's estimate.

"If you've been investing your money for almost 10 years, you're starting to think, 'How do I get a return on investment?' What we have is incredibly valuable, not just for cell therapy, but also for creating models of disease, for use as assays and other aspects of research," says Lewis. "A big company might say, 'We would be interested in acquiring you to be our stem-cell enterprise.' That's what happened over the years with antibody companies.

"I think innovation is what the industry should be all about," Lewis continues. "And with healthcare reform probably getting underway in the next 12 to 18 months, you're going to get rewarded for innovation. I don't think three multiple generations of the same drug are going to be quite as exciting. And I don't think you're going to get the return on it."


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