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Tuesday, Jul 23, 2024

Enterprise Nereus searches oceans for hidden treasures

Nereus Pharmaceuticals



President and CEO:

Kobi Sethna




9393 Towne Centre Drive, Suite 210, San Diego, 92121


Drug discovery and development company through marine research

For centuries, the oceans have been a treasure trove for humankind. Now scientists believe they have unearthed evidence that will remap the ocean floors as the next major pharmacy, stocking drugs to prevent some of the most devastating diseases.

William Fenical, a professor at the Scripps Institution of Oceanography, hopes his company, Nereus Pharmaceuticals Inc., will rank among the suppliers of such drugs.

Scientists at the 3-year-old start-up firm in La Jolla also hope their tiny microorganisms will yield life-saving drugs one day.

Fenical, who directs the Center for Marine Biotechnology and Biomedicine at UCSD’s Scripps Institution of Oceanography, and Michael Palladino, an experienced biologist and immunologist, started Nereus in 1998 with $1 million in seed funding from Forward Ventures, a venture capital group in La Jolla.

Forward Ventures’ director Stan Fleming hired Kobi Sethna to guide Nereus through the rough waters of being a start-up.

Sethna, a veteran in the pharmaceutical industry, said he was intrigued by the premise of deep sea discoveries.

“Over the last 60 years, microbes from terrestrial sources have been exploited enormously,” said Sethna, president and CEO of Nereus.

The exploitation of terrestrial structures yielded more of the same structures, thus slowing the path to new drugs.

That window opened with new techniques, such as combinatorial chemistry and genomics.

But they too have yet to fully deliver on their promise, Sethna said.

Nature, meanwhile, has already proven to be “a very good chemist,” he said.

And the oceans are likely to be filled with biological secrets.

Fenical said he is one of few scientists dedicated to unlocking such secrets.

“For 10 years I have invested time in understanding where these microorganisms reside, what type they are, how to cultivate them and devised ways to grow them,” he said.

“The further you go out, the deeper the sediments, the more interesting biology becomes.”

Yet, whether these findings will yield drugs remains questionable.

“The genomics revolution is bringing us many more (drug) targets and the pharmaceutical (companies) need more ammunition in form of interesting molecules. Nereus is designed to provide the ammunition they need over the next 20 years,” Fleming said.

Sethna admits the stakes are high.

Only one out of roughly 150 promising molecules from nature becomes a drug.

But that this is still better than the one out of 20,000 ratio in combinatorial chemistry, he added.

So far, Nereus has identified two drug leads: Palladino’s NPI-1302a-3, an anti-inflammatory molecule that targets rheumatoid arthritis and heart disease; and Fenical’s NPI-2350, a cancer compound.

Sethna said NPI-1302a-3 is the only compound not derived from the sea.

Yet, Nereus made it a part of its repertoire, because scientists have proven that its targets , TNF-alpha and Interleukin-1 synthesis , are involved in inflammatory disease.

Two injectable TNF-inhibitors on the market prove that. Nereus wants to make a better, oral version with fewer side effects.

Palladino said he had already put together a business plan based on his anti-inflammatory work when he was a graduate student at New York University.

Joint Effort

When Fenical and Palladino met in 1998 to discuss their work, they realized quickly the potential for synergy.

“(We realized) we were able to create considerable chemical diversity from our sources,” Fenical said.

Fenical had several compounds for which UCSD did not have the financial backing to turn them into pharmaceutically relevant drug candidates.

Fenical still gets excited talking about the discovery of his lead compound.

“We were in the Bahamas where we had a nice research program to study the types of microorganisms that live on the surface of marine plants,” he recalled.

A green marine plant by the name of halimeda had fungi growing on its surface. The substance, halimide, has shown to slow cancer growth, making it a promising compound.

Fleming found the molecules intriguing enough to fund the drug discovery effort.

It was Sethna’s job to create a vision.

Long-Term Goals

After 15 months of laboring over a business plan in a tiny office at Forward Ventures, Sethna outlined the following plan.

Nereus was to focus on three therapeutic areas , oncology, inflammation and anti-infectives , develop multiple leads simultaneously, partner with a large pharmaceutical firm to fund the costly development, and hopefully grow up to be a pharmaceutical company.

Sethna said the plan struck a chord with other venture capital groups at a time when other start-ups had been stonewalled.

In its first round of financing in February 2000, Nereus raised $8.6 million from Alta Partners in San Francisco, Forward Ventures, Tech Amp International, JAFCO and GIMV n.v.

In a second round of financing, Sethna raised an additional $23.6 million, which will be enough cash to keep Nereus afloat until 2004.

With a bit of luck, Nereus will test at least one compound in humans by the end of 2002 and sign a partnership deal, Sethna said.

John McCamant, a biotechnology analyst and editor of the Berkeley-based Medical Technology Stock Letter, said the affiliation with a world-renowned institution like Scripps gives Nereus legitimacy.

Thriving Competition

On the other hand, he said, Nereus isn’t the only firm combing the ocean floors.

Biopharmaceutical company PharmaMar, a subsidiary of Zeltia Group based in Madrid, Spain, has recently signed a $100 million agreement with a Johnson & Johnson unit to co-develop and co-market a cancer compound that was isolated from a marine invertebrate.

CalBioMarine Technologies, a privately held firm in Carlsbad, is also looking at marine organisms to find drug candidates.

McCamant sees difficulties ahead for Nereus’ lead compound, which faces stiff competition.

He argued San Diego-based Isis Pharmaceuticals, Inc. has a much better chance of developing an oral anti-inflammatory drug, given its vast experience and expertise.

Still, Fenical is likely to grow Nereus’ pipeline of molecules.

While tourists frolic in the Caribbean, or the Pacific Ocean or the Red Sea, Fenical is busy lowering his “mud missile,” a mechanical device some 700 feet into the sediment.

“We take the sediment and sprinkle it on a microbiology cultured dish and the microorganisms on the sand grains begin to grow,” Fenical said. “All the sudden the plate turns orange and things start growing. We pick up the tiny cells with a wire and transfer them to a new plate. We do this a hundred times.”


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