3 UCI Researchers Form Firm Aimed at Fighting Alzheimer’s
Three nationally known brain researchers at UC Irvine who have spent more than two decades studying the origins of memory have formed a private pharmaceutical firm to develop diagnostic products and drugs to help victims of Alzheimer’s disease.
Cortex Pharmaceuticals, which expects to generate patent revenue for UCI as well as profits for its founders, plans to use genetic engineering to design drugs that will not only halt disease-related memory loss but even sharpen the mental skills of healthy people.
Within six months to a year, Cortex plans to hit the market with an odor identification test to diagnose Alzheimer’s disease, a progressive deterioration of the brain associated with aging.
One of the earliest symptoms of the currently uncurable disease is a loss of ability to distinguish new odors--a process that scientists at UCI have been simulating by trying to get brain-damaged rats to identify scents pumped into mazes.
The human test, which determines whether subjects can detect the same scent twice over a short time span, is expected to generate sales of $10 million a year because of the extreme difficulty of diagnosing Alzheimer’s, especially in its early stages. Currently, the disease can be diagnosed with complete certainty only in an autopsy.
An olfactory test for Alzheimer’s, on which UCI will hold the patent and receive royalties, will probably provide Cortex with its first salable product, according to Dr. Harold R. Hutchings, a physician who is president and chief executive officer of the company.
Cortex’s primary goal, Hutchings said, is to make headway in diagnosing, slowing and eventually reversing age-related diseases, such as Alzheimer’s, that impair brain functions and add to the hardships of aging.
But the development of new drugs to sharpen the recollection of Alzheimer’s patients, he added, could also help auto accident victims and other victims of traumatic brain injuries, not to mention those who simply want to improve their memory.
The three UCI professors who formed Cortex are Gary S. Lynch, a biochemist who discovered a biochemical basis for memory; Carl W. Cotman, a psychobiologist who was the first scientist to show that damaged brain cells can be induced to regrow, and Ralph A. Bradshaw, who was among the first scientists to identify protein molecules that regulate and maintain key cells of the nervous system.
The collective knowledge and prestige of these scientists persuaded D.H. Blair, a New York investment house, to raise $2.75 million in venture capital over the last six months and assemble a management team for the new company.
Lynch, Cotman and Bradshaw will continue their teaching and research at the university but will serve as consultants to the fledgling company and take turns filling a seat on its board of directors.
Also on the company’s board are Robert Ivey, president of Ribi Immunochem Research; Harvey Sadow, chairman and founding president of Boehringer-Ingelheim, and Robert Elliott, former president of VLI Corp., which was purchased by American Home Products.
Venture capital investors own 26% of Cortex. The balance is held by the founding UCI scientists and the company’s managers.
Besides Blair, the outside investors include two other New York investment firms, James D. Wolfensohn and Integrated Resources; Westinghouse’s MedCorp Development Fund in Newport Beach; Deutsche Bank, and Carlo de Beneditti, chairman of Olivetti Corp.
Kevin Kimberlin, who put the deal together for Blair, said the development of drugs to combat forms of “senile dementia” such as Alzheimer’s that cause brain degeneration is “one of the last great growth markets in the pharmaceutical area. Senile dementia is the fourth-leading cause of death in this country, behind heart disease, cancer and stroke.”
As birthrates decline and baby boomers live longer than previous generations because of improved health, the proportion of the U.S. and world populations susceptible to diseases such as Alzheimer’s is expected to burgeon.
An estimated 2.5 million Americans have Alzheimer’s disease, and the number is expected to double by the year 2020, according to the National Institute on Aging, a branch of the U.S. Department of Health and Human Services.
The disease affects an estimated 4% to 5% of people between the ages of 55 and 65, 12% to 15% of people ages 65 to 75, and 25% to 35% of those 85 and older.
Curing Senile Dementia
Blair and other investors say they feel confident that a small entrepreneurial company will make more progress in diagnosing and curing senile dementia than larger pharmaceutical companies, which they contend have generally neglected this area of research.
Zaven Khachaturian, coordinator of research on Alzheimer’s disease at the National Institute on Aging, said he is encouraged by the formation of Cortex.
“If we are going to kick Alzheimer’s disease, we do need that sort of enterprise between the private sector and university scientists,” Khachaturian said. “It is the small, maverick companies that will come up with big breakthroughs because they are willing to take the risks.”
Throughout American higher education, the number of companies founded by scientific faculty has increased significantly in the last six or seven years, said Roger Ditzel, director of the University of California patent office in Berkeley.
While faculty have founded companies in other fields including electronics and computers, he said, biotechnology is the newest science to spawn research and development firms, reflecting a recent explosion of findings in university laboratories.
“Scientific discoveries in the area of biology are proliferating, and we are getting an incredible understanding of living cells, and therefore we can change them to do what we want,” said L. Wade Rose, assistant dean of community affairs and development at UC Irvine.
Rose and Ditzel said the University of California strongly supports faculty involvement in founding ventures based on their university research.
That is a turnaround, Ditzel said, from the resistance hat he found when he joined the university a decade ago.
Ditzel said the university has realized that a link with private industry is necessary to transfer laboratory findings into products that will benefit the public. Moreover, he said, faculty-founded companies based on scientific findings to which the university holds patent rights can generate royalty revenue for the university.
“We are trying to get companies to take the inventions in our laboratories and spend their own money to develop them, especially to get potential drugs through clinical trials required for (U.S. Food and Drug Administration) marketing approval,” he said.
‘Enthusiasm of the Inventor’
In the early stages of a company, he added, “the enthusiasm of the inventor can make the difference between whether a product succeeds or not.”
While encouraging faculty efforts to develop laboratory findings into commercial products, Ditzel and Rose said, the university takes care that public funds will not be converted to private profit.
Through patent agreements that every professor is obliged to sign, Rose said, the university maintains rights to any discovery made by a faculty member during his university work or in university laboratories.
Bradshaw said that although he has been a consultant to several biotechnology firms and serves on the board of directors of ICN Biomedicals of Costa Mesa, Cortex is his first experience at starting a company of his own.
Bradshaw said that he and other university scientists have tired of having others try to take their ideas to market and that they want to do the job themselves, partly because they believe they can do it quicker.
“It is a new game,” he said. “It is a different form of stimulation both intellectually and scientifically. I have been doing basic research for 25 years, and now I have the opportunity through this new company to see some of my findings translated into something that helps people.”
Cortex is just beginning to shift into gear. Although the company was incorporated in February, 1987, it has had a full-time staff only since July, when Hutchings took the job of president. Hutchings was previously chief executive officer of a biotechnology company in Edmonton, Canada.
Newly hired at Cortex as vice president of research and development is Raymond T. Bartus, previously director of the geriatric research program at Lederle Laboratories of American Cyanamid Co. in Pearl River, N.Y.
Bartus said he was attracted by Cortex’s unique research mission. “There are a lot of neuroscience companies. . . . What distinguishes this company from any other is that this one focuses on age-related brain diseases.”
Cortex is housed in temporary offices in Costa Mesa. Blueprints have been drawn for permanent offices and laboratory space, which are scheduled to be completed by the end of the year.
Three Diagnostic Tests
On the company’s front burner are three diagnostic tests for Alzheimer’s disease, all of which are expected to be ready for marketing within the next two years.
Besides the odor test, which is meant to spot possible Alzheimer’s victims in screenings of large populations, a blood test and a brain imaging test are under development. Both would provide more certain diagnosis than the odor test.
Hutchings said that the imaging test, which would allow dead areas of the brain to be seen on a CAT scan or X-ray to diagnose Alzheimer’s, “could put Cortex Pharmaceuticals leagues ahead of the competition” and reap sales of $100 million a year.
Included in the company’s long-range plans are drug therapies to treat Alzheimer’s patients. Bartus said Cortex is negotiating to obtain a license on a UCI-patented oral drug that seems to stimulate the release of a chemical needed to help the brain function effectively. The chemical is deficient in Alzheimer’s patients.
Bradshaw, chairman of the UCI department of biological chemistry, said he and other scientists believe that various naturally occuring protein molecules can be used as drugs in treating people with senile dementia “to at least arrest and slow the course of the disease.”
Bradshaw added, however, that a lot of research remains to be done. He expects that it will take seven to 10 years before the company succeeds in getting an Alzheimer’s drug approved for marketing by the U.S. Food and Drug Administration.
While Cortex concentrates on developing a protein molecule that will prevent brain cells from dying, Bradshaw said, other research and development companies are trying to invent techniques for getting such proteins into the brain, since the proteins are not easily transmitted into the brain through the bloodstream.
Bradshaw said he hopes that through genetic engineering, Cortex ultimately will develop a cell that can be transplanted into the brains of Alzheimer’s victims to continuously manufacture the kinds of proteins they need.
Cortex officials said they will also be on the lookout for drugs developed at other university and private laboratories.
They said that for a contract fee and a promised share in any royalties, Cortex will conduct tests using rats and primates to determine the memory-enhancement effectiveness of chemical compounds developed by outside scientists.
Hutchings said Cortex will seek a second round of financing in 1989. But before that happens, he said, he wants to file more technology patents and bring the company’s first products closer to market.
Hutchings said Cortex plans to court a major corporate partner, perhaps a chemical or pharmaceutical company.
