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As the story goes, the Cambridge-based epigenetic therapeutics company Epizyme was born on a summer California day in 2007, during an annual scientific retreat held by MPM Capital, a life science venture fund.

Each year, the bicoastal investment company hand picks a group of academic scientists to present their work around a chosen theme. That year’s theme was “new modalities for cancer,” and one of the speakers was Yi Zhang, a biochemist and biophysicist at the University of North Carolina at Chapel Hill. He was studying a number of enzymes that modify histones—the protein spools around which DNA winds—and the dysregulation of these enzymes in cancer.

Zhang told the room that it was the start of a new era in drug discovery, and that epigenetic therapies—which target not genes themselves, but enzymes regulating how and...

Zhang told the room that it was the start of a new era in drug discovery, and that epigenetic therapies—which target not genes themselves, but enzymes regulating how and when those genes are transcribed—would soon take the drug discovery world by storm. He described the success of a drug called Zolinza, which takes the brakes off silenced genes by inhibiting a type of enzyme called histone deacetylase (HDAC); Zolinza was bought by Merck for an estimated $145 million in 2004, and was approved to treat cutaneous T-cell lymphoma the year before. Other epigenetic enzymes could be targeted to create less toxic and more specific therapies.

There were entire classes of new druggable targets waiting to be discovered, he said, including those in a class he studied, called histone methyltransferases (HMTs), which regulate gene expression by adding methyl groups to selected lysine or arginine residues on histones. His lab had linked two HMT enzymes—EZH2 and hDOT1—to specific solid cancers and leukemia, respectively, and had proof-of-concept data showing that it was possible to interfere with their activity. Cancer “is just the beginning,” he recalls telling the audience that day. “Everything has risks, but if you don’t invest now, if you wait until the whole field becomes mature, you’ll be too late.”

Almost every pharma company has an internal program in epigenetics, or a strong interest in partnering with an epigenetics biotech.

It wasn’t Zhang’s first presentation to venture capitalists. Until then, he’d gotten interest but no real backing; this time, “he brought the house down,” says Kazumi Shiosaki, managing director of MPM and CEO of Epizyme, who was at the retreat. After a few months of intensive meetings, Epizyme launched with the joint backing of MPM and Silicon Valley stalwart Kleiner Perkins Caufield & Byers, raising $14 million in its first round of funding. Last December, the company brought in an additional $40 million in venture capital cash. As a Howard Hughes Medical Institute Investigator, Zhang can’t be in the direct employ of a company, so he is Epizyme’s cofounder and a scientific advisory board member. The company is starting by targeting HMTs.

Select companies pursuing epigenetic drugs
Epizyme (US)$14 million in venture capital funding from MPM and KMPG in 2008; an additional $40 million last DecemberFounded in 2008. Focusing on targets against HMT.
Constellation (US)$32 million in venture capital funding from Third Rock and others in 2008Founded in 2008. Working on targets against HMT and HDM.
CellCentric (UK)February 2010 licensing deal with Takeda Pharmaceuticals potentially worth more than $200 millionFounded in 2004. Developing targets against HMT, HDM and ubiquitin-related enzymes.
EpiTherapeutics (Denmark)DKK 34 million ($6 million) from investors and government grantsFounded in 2008. Focusing on targets against HMT and HDM.
Chroma Therapeutics (UK)$53 million in Series C financing, 2006; $23 million in Series D financing, 2009Founded in 2001. Next-generation HDAC inhibitor for cancer in Phase 1 trials; an undisclosed chromatin target for cancer and other HDAC inhibitors for inflammation in lead optimization.
ValiRX (UK)Publicly traded since 2006Founded in 2006. Developing diagnostics that recognize cancer-associated epigenetic changes, and two gene-modifying drug compounds in early testing.
Celgene Corporation (US)Publicly traded since 1987Founded 1986. In 2008 acquired Pharmion, developer of demethylating agent Vidaza, approved in 2004 to treat blood disorders called myelodysplastic syndromes. In 2010 acquired Gloucester Pharmaceuticals, developer of Istodax, an HDAC inhibitor approved in 2009 to treat cutaneous T-cell lymphoma.
MethylGene (Canada)Publicly traded since 2004Founded 1995. Focus on kinase and HDAC inhibitors; three current HDAC inhibitors in Phase I and Phase 2 testing for cancer, fungal infection, and (in collaboration with EnVivo Pharmaceuticals) neurodegenerative diseases.
Cellzome (UK/Germany)March 2010 deal with GlaxoSmithKline potentially worth $654 millionFounded in 2000. Recent interest in epigenetics targeting HDACs and HMTs.

And just as Zhang predicted, less than three years after his speech to MPM, almost every major pharmaceutical company has an internal program in epigenetics, or a strong interest in partnering with a new crop of biotech companies starting to make their mark on the space. This February, a UK company called CellCentric, which works on HMTs, histone demethylases (HDMs, which remove methyl groups from histones), and a third class, ubiquitin-related enzymes, signed the first major pharma licensing deal—potentially worth more than $200 million—to develop compounds for targets beyond HDACs. In March, an Anglo-German company called Cellzome targeting HDACs and HMTs announced a partnership with GlaxoSmithKline with an upfront payment of $45 million, potentially worth $654 million with milestones, using its technology to identify epigenetic drugs for immunoinflammatory diseases.

“I think the speed with which we’ve gotten to the pharmaceutical industry has been very quick,” says Mark Levin, a partner at Boston-based life science investment firm Third Rock Ventures, who helped found Constellation Pharmaceuticals, another Boston epigenetics company that launched with similarly strong venture backing to Epizyme.


Zolinza wasn’t the first FDA-approved epigenetic drug. A few years before, the agency had okayed two others of a different class, chemotherapy agents that also inhibit DNA methylation, to treat blood diseases called myeloplastic syndromes. But the drug has become something of an epigenetics poster child, and paved the way for the field. “I think HDACs have proven that it’s doable [to produce a drug that targets epigenetic processes],” says Will West, CEO of CellCentric. But while several pharma companies and biotechs continue to pursue HDAC inhibitors, only one other HDAC inhibitor, Istodax, developed by Gloucester Pharmaceuticals (acquired by Celgene this year), has been approved since.

“The epigenome regulates transcription, so eventually, epigenetics can be targeted for almost any kind of disease.” 
—Yi Zhang

HDAC inhibitors have been plagued with toxicity because they target general processes in a cell, such as apoptosis and differentiation. These processes play a special role in tumor cells, but since the drugs aren’t aiming at a specific disease-causing process such as a mutation, they also damage some normal cells, causing significant side effects. Specific HDACs also aren’t known to play a causative role in disease—for example, they don’t seem to be overexpressed in cancer cells, says Kristian Helin, chief scientific officer of EpiTherapeutics, a Danish company founded last year. “There’s no biological evidence that [HDACs] are involved in a particular form of cancer,” he says.

“On the other hand, methyltransferases have amazing specificity,” says Zhang. There are multiple amino acids that become methylated, and each methylation site is regulated by a particular HMT. The hope, he says, is to identify how mutations cause cancer by upregulating specific methyltransferases, and develop compounds to block those specific enzymes. “We have much better genetic evidence” than with HDACs, says Helin, who is also the director of the Biotech Research and Innovation Center at the University of Copenhagen, including accumulating data on how specific HMTs change in specific cancers. “And that means when you work on the chemicals, you know what types of tumors you want to see efficacy in.”

One of the things that got both scientists and investors excited about these targets is that there are multiple classes of enzymes to explore, says Levin, who founded Millennium Pharmaceuticals, one of the first genomics biotechs, in 1993. That means that within a single class, researchers will be able to apply the biology learned about one enzyme to its cousins, which may show more specificity for that disease or others, says Mark Goldsmith, Constellation’s president and CEO. In total, there are about 10 known classes of enzymes that regulate gene expression by modifying histones. Newer, second-generation epigenetics-based biotechs—such as CellCentric, EpiTherapeutics, Epizyme, and Constellation—are largely focusing on HMTs, as well as HDMs. The primary attraction of these classes is that they are large, constituting about 75 enzymes in total, and that there is good evidence for their deregulation in various diseases. “You have to start somewhere, but I have no doubt that this [search] will be expanded to all the classes [of chromatin modifiers],” says Zhang.


So far though, epigenetics companies have explored little beyond cancer. “The epigenome regulates transcription, so eventually, epigenetics can be targeted for almost any kind of disease,” says Zhang. “I think [indications beyond cancer are] still a few years behind, but there is a lot of literature just starting to develop,” agrees Levin.

Despite the field’s optimism, researchers and companies realize how little they still know about pulling therapies out of epigenetics. “There’s a great deal of work to be done to biologically characterize these targets and understand the consequences” of selectively inhibiting gene-modifying enzymes, stresses Goldsmith. It’s hard not to wonder whether the promise of epigenetic drugs is as overhyped as the promise of drugs based on genomics, which have delivered a disappointing yield, concede Levin and other proponents of genomic therapies. The race for epigenetic drugs beyond HDAC inhibitors has barely left the starting line, with most companies still optimizing leads or just entering preclinical testing. Still, says Helin: “A drug takes 10–15 years to develop from scratch. There’s not much you can do about it.”

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