From the Science of Cells to Art of the Sale
UCLA researcher Asim Dasgupta believes discoveries made in his laboratory could lead to a cure for hepatitis C, a smoldering, sometimes lethal liver disease that affects an estimated 3 million Americans--most of whom have no idea that they are infected. The same scientific principle might provide new treatments for other viral infections, including the common cold.
Like a growing number of researchers, Dasgupta has been infected by the entrepreneurial spirit and has started his own company, called Verasim. He’s been paying the early bills out of his own pocket.
So far it is a virtual company, without significant funding and no employees. This is biotech in its earliest stage--the equivalent of building computers in the garage or writing software in a home office.
Dasgupta’s attempt to build a business based on his university research illustrates the frustrations and potential rewards of commercializing science at major research centers in Southern California--and all over the country--at a time when money for biotech start-ups is scarce and the time between discovery and marketable product is as long as ever.
A professor of microbiology, Dasgupta, 48, is comfortable in the world of test tubes and teaching, and less so in the world of business plans, marketing and product development. Now, after a few false starts, he’s learning the flint-hard realities of corporate financing.
He estimates he’ll need $4 million or so during the next two years to find out if the basic science he’s been engaged in at UCLA under National Institutes of Health grants can be translated into real products. He thinks he’s on the verge of securing the money. He’s been negotiating details with a local company, and he says a Bay Area venture capital firm is interested.
These days he alternates between passionate optimism and sober fatalism. As he well knows, on both the financial and medical sides of the biotech business, the drug development road is rough and sometimes strewn with impassable boulders.
In presentations to investors, he describes the products that could grow out of his research as having the “potential to be the next penicillin”--doing for a large class of viruses what the first antibiotic did for infectious bacteria.
But it took 13 years from penicillin’s discovery to its initial testing in human patients. And Dasgupta is aware of antiviral agents that were extremely promising until they were tested in humans, with fatal consequences.
“I hope it works. Praise to God it works,” Dasgupta said. “Not for the money, but for hepatitis C.”
However, there are times, he confessed, when he wants to be done with business and put all of his energy back into basic research. It’s taken him five years to get to this point, and he admits to being discouraged by the slow progress.
“I was almost ready to give up,” he said.
Born in India, Dasgupta got a doctorate from the University of Nebraska. The budding scientist continued his training under David Baltimore, then at the Massachusetts Institute of Technology and now president of Caltech.
Dasgupta and his work with antiviral agents burst briefly into public awareness in 1994, with newspaper stories and a favorable mention in Time magazine--all proclaiming that he’d found a new way to attack the common cold.
The underlying discovery was serendipity.
Then, as now, Dasgupta was studying a family of viruses that have at their core ribonucleic acid, or RNA. Dasgupta grew the viruses by infecting animal or human cells raised in a soup of nutrients. Once inside the cells, the viruses commandeered the cell machinery to produce more viruses.
The process is expensive, and the UCLA virologist, who has enjoyed a steady stream of NIH grants, tried to grow the RNA viruses in ordinary baker’s yeast instead.
Yeast cells are surprisingly similar to animal cells--including those in our own bodies--but Dasgupta could not grow the viruses in yeast. He asked a graduate student to try to find out why. The answer surprised them.
In human and other mammal cells, an infecting virus must be “activated” before it can make copies of itself. No one knows why, but it takes a protein produced by the cells to start the process. The protein fits into the virus the way a key fits into a lock, close to the point where copying begins.
Dasgupta and his student found that the yeast cells--unlike animal or human cells--were producing a natural substance that kept the key from entering the keyhole and prevented the viruses from multiplying. The researchers believed that the natural substance--or a synthetic chemical that did the same thing--could stop and possibly cure RNA virus infections.
Soon the media came calling. “Does Ordinary Baker’s Yeast Hold Secret to Curing Common Cold?” asked one headline.
That was almost five years ago, and Dasgupta says he now is working with two substances that stop virus growth in animal cells grown in the laboratory.
UCLA applied for a patent on the lab’s discoveries, and this year the university was notified that the patent will be allowed. Dasgupta’s company, which he incorporated in 1996, negotiated an exclusive license from the university. UCLA will hold a small equity interest in the company--10% or less--and will receive royalties from sales of any product.
Dasgupta has talked to several pharmaceutical and biotech companies that are interested in commercializing the science. But they drive hard bargains. One biotech firm offered Verasim space in its laboratories and wanted 80% of the company in return.
Over the years, the focus of the research shifted from cold viruses to hepatitis C. The problem with developing a drug for the common cold, Dasgupta said, is that there is no easy way to test it in animals, which aren’t susceptible to cold-causing microbes. And colds rarely lead to serious illness, so experimental treatments must be shown to be almost risk-free before tests begin with patients.
Hepatitis C, on the other hand, has emerged as a significant threat. Transmitted primarily by transfusions, tainted needles or sexual contact, it is usually mild at first, causing no symptoms for as long as 30 years, according to the Centers for Disease Control and Prevention. (Screening of the blood supply has sharply reduced the risk of getting the disease from a transfusion.) Of those who are infected, however, 70% develop chronic liver disease, 15% suffer significant liver damage and 5% die of the disease.
Before the new drugs can be tested on patients, Dasgupta plans to try it first on a breed of mice that will accept transplants of virus-infected human liver tissue. If the chemical agents cure the infection without harming the mice, Verasim will seek permission to test the drugs on terminally ill patients.
Other scientists familiar with Dasgupta’s work warn of many pitfalls between discovery and developing a meaningful treatment, especially in an area of science in which understanding is incomplete. One problem with any drug is delivery--getting enough of it to a patient’s infected cells, said Eckard Wimmer, a virus researcher at State University of New York at Stony Brook.
Others, while acknowledging Dasgupta’s contributions to the study of viruses, point out that no one has yet repeated the original experiment that found the virus-blocking agent in yeast cells.
And with any experimental drug, there is the danger of unanticipated side effects. Dasgupta pointed to a promising drug for treating another form of the disease, hepatitis B. During clinical trials conducted by NIH investigators several years ago, five out of 15 patients suffered liver failure and died.
UCLA supports Dasgupta’s efforts. “What we’re encouraging is rapid technology transfer from the university to industry,” said the school’s vice chancellor for research, Kumar Patel.
“There is more interest among the faculty in at least looking into start-up company relationships within the past five to seven years,” said Patricia Brennan, UCLA’s interim director of sponsored research. But for the companies to succeed, “there has to be a commitment on the part of the inventor.”
It is more difficult to get financing for biotech start-ups than it was just a few years ago. Venture-capital funds that once set aside 30% for stakes in health-care businesses have “cut back to 20% or cut back to zero,” said Lori Rafield of Patricof & Co. Ventures in Palo Alto. But there is still money out there for “big ideas.”
Now Verasim may be close to getting the money it needs to hire a manager and begin animal experiments.
“This is a way to pay back the community,” Dasgupta said. And should he succeed in getting his financing, he’d like to stay close to home. “I’m not going to San Diego,” he said. “I’m going to stay in Los Angeles.”
