Emerging Drug Developer: Concert Pharmaceuticals

Concert Pharma keeps it simple

The science that Concert Pharmaceuticals is pursuing is the essence of simplicity.

After spending years on the discovery side of the business, Roger Tung, PhD (pictured), had known since graduate school days that if you strategically replace hydrogen molecules in therapeutics with deuterium, its ability to bind better with carbon could positively influence efficacy and side effect profiles.

Why not turn that observation into a technology platform and build a new biotech around it?

Armed with that idea and an introduction to some of the movers and shakers in the start-up world, Tung has done just that, raising $95.5 million in less than two years and laying out a runway of development activities for the next two years. In that time, he may be able to attain proof-of-concept data on a lead therapy while advancing a lineup of preclinical programs into human trials. And he can also build on the 100-plus patents that have been filed to protect the intellectual property on a range of medicines that the company intends to significantly enhance with its molecular makeover approach.

“It is very simple in a lot of respects,” observes Tung. “And like a lot of simple ideas, it escaped people’s notice because it was in plain view.”

Last week Tung announced Concert’s $37 million Series C, which came just 21 months after the first round. And this time around, he had built significantly on his original short list of investors with a lineup of firms that have experience funding both public and private companies: Adage Capital Management L.P., SR One Ltd. (GlaxoSmithKline’s independent healthcare venture fund), Mediphase Venture Partners, and Westfield Capital Management. All of Concert’s existing investors from previous financings participated in the Series C, including Three Arch Partners, TVM Capital, Skyline Ventures, Brookside Capital Partners Fund, LP, Flagship Ventures, Greylock Partners, New Leaf Venture Partners, and QVT Fund LP.

“I conceptualized this about a year after I left my last job,” says Tung, who had been vice president of drug discovery at Vertex. “I was working as an independent consultant, formed a one-man LLC and wrote patents literally by myself.”

An old colleague from his Vertex days, Rich Aldrich, had started a successful hedge fund in Boston. And Aldrich was so intrigued by what he heard that he persuaded Christoph Westphal, a serial start-up artist with a string of biotech hits at Momenta, Alnylam and now Sirtris, to come in with him as a co-founder.

They closed their first round in seven weeks.

In the meantime, Tung has built up a staff of 40 and turned to experimenting with deuterium substitutions. “Because we know so much about the drug,” he says, “we can pick out cases where the changes we’re seeing have the potential to translate into clinically favorable effects.

“What we have is a remarkably low-risk approach to taking existing drugs, maintaining that unique balance of safety and efficacy but improving on it in specific ways that we can see in detail.”

And the company can gain insights from some of the drug’s original discoverers.

“We know how the original drugs were developed,” says the CEO. “In many cases the drugs we’re working from are compounds long since developed. We can get access to the people involved and ask them, if you could go back, what would you do different and better?

“Of the 2,000 to 2,500 starting points, really all the drugs in the world, we have picked out our favorite 100 of them,” says Tung, while keeping the efficacy and safety potential, commercial prospects, competitive aspects and the technology in mind.

The lead therapy is an enhanced drug for hot flashes, a potential blockbuster in a field that has been roiled by safety issues now surrounding hormone replacement therapy. Phase I data for an initial single ascending dose trial should be in by the end of this year with Phase Ib data on drug-drug interactions coming in early 2009.

“We’re in a very unusual position for a small molecule company,” he adds. “Most companies in a start-up situation are pinning all of their value on one or a couple of agents. We’re in a situation where we believe we will have many new chemical entities with new patent lifetimes that represent a lot of value in different areas -- antiviral, oncology, schizophrenia, renal disease, a wide variety of areas. We can form partnerships with pharma companies, create strategic relationships with vendors, do spinouts of companies, or take a traditional approach with an IPO.”

New venture rounds could also be raised, and new licensing deals are also a distinct possibility.

Sums up Tung: “It’s all on the table.”