Startup Vicar Bets On Gene Therapeutics

San Diego firm's future hinges on the success of a serendipitously wrought treatment for a variety of genetic diseases Until March of this year, no one paid much mind to Wick Goodspeed, president and CEO of Vical Inc. With a staff of 22 scientists, his three-year-old biotechnology company in San Diego was just another startup hoping to cash in on the $2 billion-plus markets for innovative drug design and drug delivery methodologies. Then serendipity stepped in. While looking for a new way to deliver drugs to specific parts of the body, University of Wisconsin scientists collaborating with Vical stumbled on a technique that may provide an approach to treating genetic diseases that surpasses other approaches--gene therapy, especially--that currently are being developed. The results of the company's research were published last March in Science (247:1465-8, March 23, 1990). Vical Inc., of San Diego, Calif., was founded in 1987 to explore new areas in lipid chemistry by focusing on drug design and delivery. Its proprietary Prosome technology uses lipid-modified derivatives to increase the potency and decrease the toxicity of several antiviral medications. Though the company has various projects in development, none is yet on the market. Under a contract with Burroughs Wellcome Co., Vical is using its technology to develop an AZT derivative that would specifically target macrophages, or scavenger white blood cells, which are suspected of serving as a reservoir for the AIDS virus. That same technology has the potential to improve the effectiveness of antivirals used against herpes and cytomegalovirus. Physician Karl Hostetler, inventor of Vical's patented drug delivery technology, and physician Douglas Richman, who was head of one of the five trial sites for AZT, began the company with seed capital from Biovest Partners, San Diego, a venture capital group. The firm's partners are Ted Greene and Tim Wollaeger, who were integral to the success of Hybritech. Other investors since then include Sequoia Capital, Hillman Ventures, Morganthaler Ventures, and Security Pacific Capital Corp. --C.P.W. Still in the early stages of development, Vical's advance holds the promise of reaping big profits for the firm and of providing cures for the thousands of victims of diseases such as muscular dystrophy. Presumably as a result of the Science report, says Goodspeed, potential investors have been showing increased interest in his company. At the same time, commercialization of this approach is not so far along that Vical's move into the limelight darkens the future of other companies pursuing other treatments for genetic diseases. Instead, those companies applaud Vical's progress and see it as boosting the medical community's faith in the potential of biotechnology in treating so-called incurable diseases. Besides, they know that this newcomer to the field has yet to face some of the obstacles common to biotech start-ups. "Nobody panics when a result like this is published because no one can fully assess what all the implications of the work might be," says Philip Whitcome, president and CEO of Neurogen Corp. in Branford, Conn. "It's not clear that the results in one area are going to short-circuit or pre-empt the type of research that goes on in lots of companies." Neurogen is developing human therapeutics, including gene therapy. The two techniques now emerging--gene therapy and Vical's gene therapeutics--are also expected to fill different scientific and, hence, commercial niches. "There appears to be tissues where this technique [gene therapy] doesn't work and where retroviruses are still superior," says Dusty Miller of the Fred Hutchinson Cancer Research Center in Seattle, who has been working on gene therapy since 1982 and whose lab has tried various tissue targets. "So I don't think retroviral people are going to be out of work." Adds Brad Gorden, vice president, finance and corporate relations, of another gene therapy company, Viagene Inc., of San Diego,"We don't know yet if gene therapeutics and gene therapy are mutually exclusive. Their end biologic and therapeutic effects may have more relevance during one period of disease than another." Whether Vical corners the market in treating genetic diseases may be a moot point, however, adds Gorden, who speculates that Vical may be in over its head financially. "An opportunity can be huge, but if it's not realized in 20 years it's of limited value to the investment community," he says. Neurogen's Whitcome insists that Vical is going to need at least that much time. When the first gene was spliced more than a decade ago, visionaries talked about gene therapy as a new approach to treating disease. But even today, no one has manufactured or marketed a therapy based on the approach. In fact, gene therapy has developed much more slowly than anyone could have imagined, stymied more by regulatory issues than by the science itself. So it is no surprise that skeptics shake their heads when Vical starts promoting gene therapeutics. One example of the slow progress involves adenosine deaminase deficiency, which for years has been high on the list of disorders that might respond to gene therapy. R. Michael Blaese, a National Cancer Institute scientist, has only recently cleared the first regulatory hurdles that he and his colleagues must jump before patients can be treated. Compared to that slow start, gene therapeutics has not even left the starting gate. "The retroviral approach to gene therapy has gone through so much testing that there's some feeling for what it does and can do," according to Carol Marcus-Sekura, acting deputy director for the division of virology, Center for Biologics Evaluation and Research at the Food and Drug Administration. While gene therapeutics, as Vical calls it, "might be a lot easier to regulate and require less testing than current techniques, it may pose other problems," she says. W. French Anderson, physician and chief of the molecular hematology branch at the National Heart, Lung and Blood Institute, agrees with her assessment. "I think it will be difficult to get approval to inject DNA directly into patients because there will be so little control of what happens to the DNA," says Anderson, who is working with Blaese. "We even have enormous difficulty getting through regulations with our protocols, which, at present, involve taking tissue or target cells out of a patient, transferring the gene in vitro, testing the target cells and then putting the tested gene-engineered target cells back into the patient so they're not exposed to any viral vector DNA or RNA." Nevertheless, Philip Felgner, director of product development at Vical, believes Vical's technique has many advantages. "We regard the Blaese approach as inconvenient and not a pharmaceutical approach," he explains. "To take cells out of a patient, work with them, and reintroduce them isn't as simple or con- venient as [what] we're proposing [with gene therapeutics]." In addition, the genetic material introduced in vivo by Wolff and his collaborators is subsequently degraded in weeks; by contrast, up to six months is needed when retroviruses are used. If adverse effects of the therapy appear, Felgner says, merely stopping the therapy would enable cell function to return to normal. --C.P.W. Techniques to insert new genetic information into the body have great potential value for people with genetic defects. For example, victims of muscular dystrophy lack the gene for dystrophin. Without dystrophin, it seems that muscles degenerate, causing the debilitating symptoms of the disease. But gene therapy and gene therapeutics offer different approaches to solving the problem. With gene therapy, doctors use retroviruses, a class of RNA animal tumor viruses, to introduce new genes into a cell. Through genetic engineering, the retrovirus is first stripped of its potentially harmful properties and then fitted with a gene that codes for a protein that will have therapeutic value. When the retrovirus is injected into the body, it infects cells and inserts the foreign genetic sequences permanently into a cell's genome. As for gene therapeutics, Vical collaborator Jon Wolff at the University of Wisconsin discovered a different procedure to get the genetic material inside the cell. He injected plasmid DNA--circular strands of bacterial DNA into which foreign genes can be inserted-- and raw messenger RNA into the muscles of laboratory mice. Then, even though the genetic information was not incorporated into the mouse cell genome, the cell followed these genetic instructions and made proteins it would not have otherwise produced. One problem with using retroviruses is that they are theoretically capable of causing permanent and deleterious modifications. Vical's technique will not cause those changes. Also, gene therapeutics may have broader applications as a vaccine, for example, or for revving up the immune system. Vical's approach is also more familiar to scientists who are used to working with plasmids. "It's easier to get into his [Goodspeed's] game than into the retrovirus game," says Miller. "There are [several] major groups around the country, such as ours, designing viruses. But anyone can grow up a plasmid and inject it. If their technique works, the technology will be open to anybody that has a syringe." Before Wolff's experiments, few scientists suspected that mRNA or DNA, by itself, could be taken up into cells, explains Gary Rhodes, a research scientist at Vical. It was "really a serendipitous, fortuitous discovery," says Wolff, an assistant professor in pediatrics and medical genetics at the University of Wisconsin Waisman Center. At the time, he and collaborator Philip Felgner, director of product development at Vical, were studying liposome-mediated transport. Liposomes are microscopic granules of fat used to transport drugs or other substances--in this case, mRNA--to different tissues in the body. The scientists noticed that naked mRNA and plasmid DNA in their control mice were taken up into skeletal muscle even faster than the mRNA and DNA encased in liposomes. Jon A. Wolff, an assistant professor in pediatrics and medical genetics at the University of Wisconsin, can already trace his career as a research scientist back two decades, although he's only 34 years old. Wolff began working in the lab at 14, an age when most of his friends preferred stickball or basketball. Back then, Wolff volunteered to help any scientist who would let him, including those at genetics and biochemistry labs. In high school he was a semifinalist in the Westinghouse science talent search. He believes his college days at Cornell University were pivotal to his career. "I was a college scholar," he recalls, "which allowed me to design my own major--physical chemistry." After Cornell, Wolff attended John Hopkins Medical School, where he developed a curiosity about inborn errors of metabolism, a passion that now consumes his clinical time. But more than medicine had guided his life. He decided on a position at the University of Wisconsin as much for central Wisconsin as for the university's sophisticated medical center. After eight years in training at the University of California, San Diego, Wolff, an avid cross-country skier, immediately fell in love with Madison's surrounding hillsides. It stands to reason that in the winter months, when not toiling away at his research, Wolff can be found negotiating these snowy slopes. Besides the moral support he gets from his family--his wife and three children--Wolff says his colleagues "are great. This is the best place to work." And he adds, "It's nice to realize your dreams." --C.P.W. "At first we didn't believe it," Wolff recalls. "But we've repeated the experiment over 1,000 times in different mice. And an independent lab has reproduced the results. I think it deserves the attention it has gotten." But attention may not be enough. "The barrier today for biotech companies like Vical is the increasing uncertainty of whether financial markets will continue to support these companies as they go through the long and uncertain regulatory environment," says financial analyst Steven Burrill, national director of high technology practices for the accounting firm Ernst & Young in San Francisco. "Venture capital and public funding have gotten more expensive, less available, and more discriminatory." Investors want quicker turnaround on their money. Like many potential advances, there are still many unknowns. I think the research is very interesting and promising and seems less cumbersome than some things done in the past, but none of us knows at this moment why it works," says Nelson Wivel, director of the office of recombinant DNA activities at the National Institutes of Health. "We have to ask how the RNA and DNA get taken up into the cell, what will happen over time with repeated injections, how widespread is its usefulness, and what limitation of the number of genes put into one site would be effective," Wivel says. To improve its chances of survival, Vical needs to improve on gene therapeutics so that the inserted genetic information leads to increased production of the desired substances within the cell. Wolff says that scientists will need, in general, to optimize protein production by five- to 10-fold. A two- to five-fold increase in protein expression, for example, may be sufficient to see a therapeutic response from dystrophin. But it will not help in cases in which therapeutic substances are needed in larger amounts. Vical may also break into immunotherapy and use its technique like a vaccine. Instead of simulating a viral response, genetic material introduced for immunotherapy would boost and modify the immune response with minuscule amounts of proteins like interleukin and interferon. Unfortunately, there are other therapeutic chemicals like TPA, which dissolves blood clots, that must be present in much greater quantities. For those chemicals, says Felgner, the gene therapy won't work. Nevertheless, Vical has filed a patent application and is "committed to pursuing the technology no matter what," says Felgner. And, he adds, "advisers we've brought in have predicted that Vical will have an ownership position in this area and benefit from it as a company." Wolff is more cautious, however, and compares his research to watching an infant walk. Says Wolff: "When a child takes one step, you can't say he's going to run now. You have to merely say he's taken his first step. This is what our research represents--the first step." Cheryl Platzman Weinstock is a freelance health and science writer based on Long Island, N.Y.

Startup Vicar Bets On Gene Therapeutics

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