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By Nathan Peck | MiBiz
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Stephen Benoit, left, joined Metabolic Solutions Development Co. to bring a full-time presence to the CEO position as the company works to push its compounds into the drug pipeline, said co-founder Jerry Colca, right. PHOTO: BRIAN BANKSTON

KALAMAZOO — Jerry Colca and Rolf Kletzien have a good idea that they very well might have a real pharmaceutical breakthrough in their hands.

Colca and Kletzein, founders of Metabolic Solutions Development Co., look to grow the five-year-old company into a major player in the treatment of diabetes and metabolic diseases. As part of that strategy, Metabolic has hired its first full-time CEO, Stephen Benoit, the former president and COO of the Global Food Protection Institute in Battle Creek who has extensive pharmaceutical experience.

The company has wrapped up two clinical trials of its first two drug compounds and is evaluating the results as they look to partner with another company to bring these products to market.

Importantly, Metabolic is perhaps the farthest along and has the greatest wide-ranging potential impact of all the small local life sciences companies to be created in the wake of the changes at Pharmacia and Pfizer about a decade ago. In an exclusive interview with MiBiz, Colca and Benoit discussed the company’s growth and strategies for the future.

“We are very excited about the developments over the last six months, but the data will eventually drive the story,” Benoit said. “Things are well positioned for some pretty exciting times.”

The board of Metabolic Solutions brought Benoit aboard as it closed a $23.5 million round of funding earlier this year. The board determined that a full-time CEO was necessary to take the company to the next level as it looked to partners in the pharmaceutical industry to help bring their drugs to market.

“This is a full-time job. It is not just managing the people we have here, but also managing our partners, and then figuring out where you are going next with the potential possibilities,” Colca said.

Pressing research

Colca and Kletzien focused on understanding the mechanisms at work inside of the cells, particularly how the mitochondria play a role in a host of diseases ranging from diabetes to Alzheimer’s. Metabolic Solutions’ first two compounds are members of a category of drugs known as insulin sensitizers, which improve the way insulin functions in the body. The compounds are based on drugs that Colca and Kletzein developed during their work at Pharmacia and later Pfizer.

The researchers are finding that the function of mitochondria in the cell play a significant role in a host of diseases. The drugs positively impact glucose levels, as well as lipid levels, while avoiding the adverse side effects of other drugs on the market. Metabolic function has been linked to heart disease, Alzheimer’s and diabetes.

Understanding the mechanisms at work inside the cell, they argue, will give them insight into how the cell’s metabolism affects the onset of a host of diseases, ranging from diabetes to Alzheimer’s. Metabolic received a $773,000 grant from the Alzheimer’s Drug Discovery Foundation (ADDF) to conduct a pilot Phase 2a trial of MSDC-0160, the first compound for the treatment of metabolic diseases associated with altered mitochondrial function.

The impact of drugs that could impact metabolic syndrome, Colca said, could be huge, provided that their results hold up and they can move to a successful launch.

“This is a very large space. When we talk about this space — diabetes, pre-diabetes, obesity, metabolic syndrome, heart disease, Alzheimer’s — all of them could be impacted,” Colca said.

Metabolic is working on developing the third generation of their compound, one that is significantly different than what’s found in diabetes drugs Actos and Avandia, both of which have been significantly limited in their use due to severe side effects.

“At the end of the day, you want to have products. And whether you end up with a product depends on: one, can you get it approved, and two, is it going to continue to be there, or will you end up with some sort of problem that will remove it from the market like often happens,” Colca said. “You could have products in these spaces, so what you want to do is have a number of shots on goal … a number of possibilities so if something happens to the first one, you save the first one, but we have another one behind it, and another one behind it.”

Tightening markets

In an environment where the largest players in the pharmaceutical industry face the potential losses of billions as blockbuster drugs lose patent exclusivity, Metabolic brings a new model. The two best-selling diabetes drugs on the market, Actos and Avandia, once made nearly $20 billion in global sales four years ago and the market is ripe for their products, said Colca.

“There are a lot of possibilities there. The pharmaceutical industry has a lot of issues themselves, holes they’re trying to fill. They haven’t really figured out how to go after these diseases,” Colca said. “We think our idea is one of the best ways to go after initially the cause of a lot of these diseases. It is not something they are going to do on their own. We’ve been able to do it to this point. But what we need now is additional capital.”

Drug discovery is historically a lengthy and costly process, typically taking 15 years to bring a bench discovery through to a marketable product. What is remarkable, Colca explained, is they will be able to bring a compound to new drug application (NDA) stage in half the time.

“For a lot less than $50 million, we’ll have brought three compounds to market in less than eight years,” Colca said. “In the beginning, not that many people believed us, but now that the data starts to get there, we can raise more money, and now the opportunity to do something bigger is growing. We have to make some very important decisions about how much do we build on our own and how much we are willing to do with a pharmaceutical partner.”

The company is looking to find partners to which it would license the drug so the pharmaceutical company could produce, market and develop the sales channels for Metabolic’s first drugs. The company is planning to maintain its intellectual property and reinvest in its continued research while a partner would move its first two compounds, known as MSDC-0160 and MSDC-0602, into Phase 3 trials, and then on to the NDA stage should the results of the trials support submitting the compounds to the Food and Drug Administration.

“Where we are is really the key inflection point for most of these pharmaceutical firms where they want to acquire, partner — whatever it might be — assets like what we are developing,” Benoit said. “That is the inflection point where the risk is greater than 50 percent of success, whereas before it is well under 50-percent probability of success. You have proof of concept. …You have a clear clinical pathway going forward.”

The next six months will be critical, he said.

“One thing we understand is … your value is created by having a product. We are pretty clearly focused on execution,” Benoit said. “Whether we do that alone or with a partner, it doesn’t really matter. The execution has got to be near flawless.”