Charlottesville biotechnology company HemoShear Therapeutics could receive over $470 million from a new partnership with Takeda Pharmaceutical Company, Asia’s largest pharmaceutical firm.
Takeda, headquartered in Japan, will have exclusive access to HemoShear’s proprietary platform for modeling diseases in extracted human tissue to discover and develop new drugs for specific liver diseases.
HemoShear will receive payments from Takeda as drug candidates reach clinical and commercialization milestones. It also will be eligible for royalties from approved drugs.
Takeda is seeking to develop therapeutics for nonalcoholic steatohepatitis (NASH), which affects an estimated 16 million Americans. NASH, characterized by excess fat and inflammation in the liver, can lead to scarring, cirrhosis and liver cancer. The Food and Drug Administration has yet to approve a drug for NASH.
“We should be able to give Takeda a best-in-class drug target for NASH within the next two years,” said James Powers, CEO at HemoShear. “Takeda has seen our ability to understand the biology of diseases, and predict how humans will respond to drugs. It has given them great confidence in us.”
Powers said the global market for NASH drugs could be valued at $20 billion to $40 billion within the next decade. Two major risk factors for NASH— obesity and late-onset diabetes— are on the rise worldwide.
“NASH is the next biggest global disease for which there are no therapies,” he said. “Companies all over the world are placing billion-dollar bets on different drug candidates. The competition is fierce.”
Jeffrey Gallagher, CEO of life sciences trade group Virginia Bio, said HemoShear’s partnership with Takeda was one of the most significant drug development deals ever made by a Virginia startup.
“This deal has great strategic value for both companies,” Gallagher said. “HemoShear will mature immensely from working with Takeda. I think there is a high possibility that they will become one of the anchors for a much bigger biotech economy in Charlottesville.”
HemoShear currently employs 28 people at its offices in the former Martha Jefferson Hospital building.
In 2015, Takeda entered a similar partnership with another Charlottesville biotech startup, Gencia. Takeda’s deal with Gencia included $500 million in milestone payments for developing treatments for hematological and inflammatory diseases.
Brian Wamhoff, Head of Innovation at HemoShear, said his company’s technology represents a revolutionary advancement from drug discovery and safety models that have changed little over the last 50 years.
“Scientists are still studying static cells in a dish,” said Wamhoff, a former associate professor of biomedical engineering and medicine at the University of Virginia. “A petri dish alone can’t come close to recreating blood flow and hemodynamic forces, so those cells are different from cells in a living organ.”
HemoShear’s Reveal-Tx disease modeling platform centers on a novel device that inserts a plastic cone into the liquid medium surrounding cells. The cone rotates back and forth, generating shear stress that mimics the force of blood flow on cells in the human body.
HemoShear has demonstrated that liver cells grown in these conditions retain their normal response to insulin and glucose. The company uses genome data from these tissues to create comprehensive computer models of diseases and drug interactions.
HemoShear will use some revenue from the Takeda partnership to develop its own drugs for rare, fatal metabolic diseases. These genetic disorders disrupt normal metabolism of lipids and proteins, and cause toxic substances to build up in the body. Over time, this can cause cardiovascular and neurological complications, and organ failure.
While a liver transplant can extend a patient’s life, most people born with these diseases die before age 20.
In 2015, HemoShear used liver tissue from an 8-year-old girl with propionic acidemia to create the first biologically responsive model of that disease. Today, HemoShear works with many of the world’s leading transplant hospitals to obtain explanted livers from metabolic disease patients with parental consent.
“We know these children, and we use their tissue to find a cure for them— that is a precious gift,” Wamhoff said.
While drugs for propionic acidemia and similar conditions have a small patient market, the FDA’s Orphan Drug Designation program offers a powerful incentive for companies like HemoShear to develop drugs for rare diseases with no existing cures.
Approved orphan drugs are granted seven years of exclusive approval by the FDA to treat those diseases, allowing drugmakers to keep their prices high. This law has helped to make rare diseases one of the fastest-growing areas of pharmaceutical research; in 2016, 40 percent of all new medicines approved by the FDA were orphan drugs.
“Pricing these drugs will be a delicate balance for us,” Powers said. “We will have to charge a high enough price to build enough value for our investors, who have taken on a high level of risk. But crossing that bridge is several years away for us.”
‘Stacy,’ the young patient whose liver tissue enabled HemoShear’s 2015 breakthrough, has become the “poster child” for the company’s work on rare diseases. HemoShear holds the annual meeting of its clinical advisory board on July 10, the anniversary of Stacy’s liver transplant. This year, the company named its largest conference room after her.
“On July 10, the entire organization gets together to reflect on where we were, where we are now, and what we must still accomplish to help Stacy and children like her,” Wamhoff said. “It can be emotional; I am known to cry.”
“There are few industries that are as hard as drug discovery and development; failure is a part of our business,” said Wamhoff. “But when you look at the pictures of those kids [with rare diseases] in our hallways, and imagine if that was your child, the stress and worries take on new meaning,” he said.