Seattle-based Presage Biosciences has a big dream for a biotech startup—and now it has seed capital to put that dream to the test.
Presage, a spinoff from the Fred Hutchinson Cancer Research Center, is announcing today it has raised $3.1 million from angel investors to get the company off the ground at a $5 million pre-money valuation. Presage isn’t saying who invested, but they are all individuals, mainly from the Seattle area, with IT and biotech backgrounds. The board is composed of founder Jim Olson, a cancer researcher at the Hutch; CEO Thane Kreiner, a former senior vice president at Santa Clara, CA-based Affymetrix (NASDAQ: [[ticker:AFFX]]); James Towne, an early president of Microsoft; and biotech entrepreneur George Todaro.
The idea at Presage is to radically improve the odds that cancer drug candidates will successfully navigate through clinical trials. Only about one out of every 10 cancer drugs that enters clinical trials ever makes it through the hoops necessary to become an FDA approved product. That means Big Pharma and biotech companies waste a huge amount of time and money on duds. Cancer treatment is a huge business, with a global market worth $66 billion a year, and is predicted to grow to $84 billion by 2012, according to Cowen & Company. With a market that big, more than 860 cancer drugs are in development, according to a survey last year by the Pharmaceutical Research and Manufacturers Association.
“We can help halt inefficient programs at the early stages before Big Pharma companies put millions of dollars into programs that are going to fail,” Olson says. “We can help weed out the winners from the losers early on.”
Presage has already struck a deal with a pharmaceutical company that wishes to remain anonymous, and it is generating revenue, Kreiner says. The startup has six employees, and is looking for lab space in Seattle. It’s possible that with a couple more pharmaceutical customers, Presage could turn profitable by the end of 2011, Kreiner says.
The way Presage hopes to pick cancer drug winners is unorthodox. It has developed a device with five needles that have holes along the sides. These needles can deliver five different kinds of chemotherapy drugs—or combinations of an experimental biotech treatment—to different localized regions of the tumor. The drugs are made to seep out within a small radius of the needle, so doctors can see how different regions of the same tumor respond to different drugs in their native environment.
The company’s original plan, described in this feature story in May, was to perform those tests on tumors from individual patients to give physicians a better idea of which drug to prescribe. But since this meant the device would be classified as a diagnostic, it would be subject to FDA review. And the FDA hasn’t seen a device quite like this for cancer, so the regulatory pathway was too uncertain
