At a time when many biotechs are scraping for cash, one local startup is preparing to enter the clinic with $22.5 million raised.
Fate Therapeutics, named for its unique approach to controlling the destiny of the body’s adult stem cells, came onto the scene in 2007, a record year for biotechnology investment and a momentous time in stem cell research.
Perhaps not so unlike its name, Fate has assembled a team of internationally recognized scientists from Harvard University, Stanford University, The Scripps Research Institute and University of Washington who formed a company because many had collaborated on past projects.
“We have a common interest in using small molecules to regulate stem cells,” said Sheng Ding, Fate’s co-founder and associate professor at Scripps.
In a relatively short amount of time, the startup is preparing for its first clinical trial. Fate plans to begin enrolling 12 patients in a study to evaluate the safety and efficacy of its experimental drug in the next couple of months.
Unlike traditional cell therapies, Fate does not aim to treat patients with an infusion of embryonic stem cells. Instead, it is developing a small molecule drug that spurs the body’s own dormant stem cells to action. The newly charged cells then work to fight disease and regenerate damaged cells and tissues.
New Opportunities
“It’s a very exciting space to be in because, really, for the first time, it’s using a small molecule approach versus cell therapy,” said CEO Paul Grayson. “I think it’s going to offer a lot of new opportunities.”
Work in the laboratories of Ding and Randall Moon at the University of Washington helped supply much of Fate’s scientific backing. Like many scientists, Ding and Moon surmised that nature’s organisms held clues for potential new therapies.
Many of those, such as the tentacled and tubelike freshwater hydra, have natural abilities to regenerate, Ding says. Researchers were interested in the signaling pathways, known as Wnt, involved in the regenerative process.
The signal tells the body to regenerate, but Ding says that signal cannot always promote full healing of damage resulting from disease or injury. Its experimental drug would work to repair and strengthen that signal, allowing the body to replenish itself.
Fate’s ultimate interest lies in turning adult stem cells back into an embryoniclike state.
The ability to redirect fully developed, adult human cells back to a pluripotent or “stem cell” state became the subject of widespread attention last year. The scientific community lauded the progress made by researchers who had figured out ways of using ordinary skin cells to create embryonic like stem cells. Many said those advances would help overcome ethical and moral challenges attached to embryonic stem cell research and help realize the promise of regenerative medicine.
Fate Therapeutics emerged onto the scene at the same time scientists were hailing that progress.
It quickly earned attention, with a former Merck executive declaring it “the dawn of a new day in medicine.”
Well-Known Investors
During its Series A investment round, Fate attracted big-name venture capital firms Arch Venture Partners, Polaris Venture Partners, OVP Venture Partners and Venrock to raise $15 million. Since that time, it has garnered $7.5 million through an unnamed pharmaceutical company, bringing the total raised to $22.5 million, according to Chief Financial Officer Scott Wolchko.
Last year, the startup moved its headquarters from Seattle to San Diego, home of Grayson and Ding.
Today, Fate’s 20 employees work out of rented lab space in a small incubator building across from La Jolla’s Burnham Institute for Medical Research.
Its upcoming trial will study the safety and efficacy of its experimental drug in stem cell transplant patients who have undergone chemotherapy or high-dose radiation for leukemia.
The clinical trials will evaluate the use of the small molecule drug candidate applied to cord blood before transplantation. If successful, the treatment could eliminate the time it takes for the body’s blood system to replenish and reduce risk of infection during that time. Some 50,000 stem cell transplant procedures take place in the U.S. every year.
“We understand that, for better or for worse, stem cell medicines have a history of a lot of excitement and promise and it has taken a long time to deliver on that promise,” Wolchko said.
He acknowledges that Fate’s existence has also borne a great deal of hype, but says its scientists have stayed focused.
Any potential new treatments are still years away, but Fate’s executives say they have enough cash to last through 2010, at a time when many other businesses are struggling to last through the next six months.
“There’s only a few guarantees in this business and that’s you’re always going to need more money,” Grayson said. “Fortunately, we’ve got great investors in the company.”
