For those new to the Alder story, here’s some background. The company is developing what it hopes will be a disruptive technology for making antibody drugs. These are the genetically engineered Y-shaped proteins that can be made to target diseased cells and spare healthy ones. The technology has been proven over the past decade with hit products like Roche’s trastuzumab (Herceptin) that have created an estimated $30 billion annual market.
But these drugs are expensive and hard to make. They are different from the usual chemical-based pill in a bottle, because they need to be nurtured in living cells. Most antibodies are made in stainless steel vats that provide a controlled environment for nurturing mammalian cells, like those of Chinese Hamster Ovaries (CHO).
“Genentech investigated a number of approaches years ago, and CHO seemed to be the most facile system,” Schatzman says. “Everybody graduated to CHO, and microbial systems were really left behind and not fully explored.”
Alder’s big idea was to see if it could replace the mammalian cells with those from yeast. These microorganisms, after all, are a cheap source of raw material. And the yeast cells divide much faster than hamster cells, meaning that companies could operate their stainless steel vats far more efficiently than they do now, offering potential to lower manufacturing costs and widen profits margins.
All of the founders at Alder were scientists by training, and were able to grasp early on how much demand there could be for such an innovation. Schatzman, a molecular pharmacologist, got his postdoc training in the lab of Nobel laureate J. Michael Bishop. Litton, the chief business officer, got his doctorate in immunology at Stockholm University. John Latham, the chief scientific officer, was one of the early employees in the mid-’90s at Bothell, WA-based Darwin Molecular, the forerunner company for what became Celltech. And Jeffrey Smith, the chief medical officer, built a career as a medical doctor who developed a number of hit drugs, including the heartburn treatment ranitidine (Zantac).
They all knew this would be hard to do technically, and from a business standpoint. For starters, they didn’t have a license to any intellectual property from their days at Celltech. So they hunted around for a promising technique from an academic lab. They found it
