In conversation with Cydan's Chris Adams and James McArthur

Cydan "wanders the globe," speaking to investigators in small and large companies, as well as in academic labs, in search of new treatments for rare diseases. (Cydan)

Repurposing a pharma company’s castoff can be risky—just ask Axovant, which crashed and burned trying to develop Alzheimer’s meds abandoned by GlaxoSmithKline and Arena Pharma. But Cydan, the biotech builder focused on rare diseases, has found that strategy to be fruitful if you ask the right questions. 

“We began Cydan as an experiment, asking is there a better way to find, identify and develop new treatments for patients with monogenic rare diseases?” James McArthur, Ph.D., Cydan’s R&D chief, told FierceBiotech. 

The company initially looked at academic projects, aiming to pick out promising orphan drugs, de-risk them and then start companies to develop them and get them to market. 

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“We spent something in the neighborhood of 50% to 60% on those projects, but not a single company came out,” McArthur said. “What we realized is, academic labs have great ideas and innovative approaches to tackle things, but generally don’t have molecules that have the legs such that when we put them through a serious, robust de-risking effort, they stand up at the end of the day.” 

Now, Cydan 2.0 "wanders the globe," speaking to investigators in small and large companies, as well as in academic labs, in search of new approaches. 

“Now, more and more, we look at interesting ideas—and then go and find better molecules,” McArthur said. 

That’s what Cydan did with Imara, the second company it founded. Cydan happened upon research out of a Brazilian lab that showed targeting the enzyme phosphodiesterase-9 (PDE9) could be useful in treating sickle cell disease. 

RELATED: Tiburio launches with $31M and clinical-stage drugs for rare endocrine diseases 

“But not a single PDE9 inhibitor did what we were looking for,” McArthur said. “They all got into the brain, which is a bad idea for kids with sickle cell.” 

And this is where the extensive network of CEO Chris Adams, Ph.D., comes in.  

“Chris, through his rolodex, reaches into pharma companies [and tells them] we are looking for a molecule that engages the following receptor or signaling molecule. We take that and apply it in the same model systems as the academic lab,” McArthur said. 

Cydan found a potent and selective PDE9 blocker at Lundbeck, generated some data in sickle cell disease and spun off Imara. 

RELATED: Imara lands $63M crossover round to trial sickle cell drug 

“Repositioning and repurposing recently shelved molecules—for non-safety reasons—is sort of the ideal situation because you know that the pharma companies may have already done toxicity studies; maybe there is an IND we can resurrect, maybe there is a drug master file,” Adams said.  

Tiburio, Cydan’s third company, is working on a treatment for a type of pituitary gland tumor by repurposing a dopamine-somatostatin chimeric molecule originally developed for the hormone disorders acromegaly and Cushing’s disease. 

Unlike companies that license-in one or two programs and whose life hinges on the success of those assets, Cydan has the room—and resources—to fail. It has raised more than $225 million to find and develop new treatments and bring them within six to nine months of IND, McArthur said. At that point, it’s time to raise some cash and start a company to develop the drug. 

“We ask of each asset: what is the killer experiment? We are not afraid to ask that question,” Adams said. “If it doesn’t work, we just don’t create the company. Because we’re not in love with any one given asset, we can shut it down—and we have. Then we go onto the next one. It's the best thing for the project and the best thing for the patients." 

A key difference between Cydan and other accelerators or incubators, McArthur and Adams said, is that investing in Cydan means investing in its startups. That is, after Cydan has created a company, it doesn’t then have to go out and find its own investor syndicate, Adams said. 

RELATED: Fledgling biotech Vtesse in $200M buyout from struggling Sucampo 

And the transition from Cydan program to a standalone company isn’t a hard one. Someone from the Cydan team leads the company until it’s time to find a management team, and the companies benefit from shared resources, such as manufacturing expertise. McArthur himself headed Imara before Cydan recruited Rahul Ballal, Ph.D. as its new CEO. 

All three Cydan companies—Imara, Tiburio and Vtesse—have first-time CEOs at the helm. 

“They were given the opportunity to be leaders and that’s a great thing,” Adams said. 

Editor's note: This story has been updated to correct a quote from James McArthur: The first iteration of Cydan “spent something in the neighborhood of 50% to 60% on those projects, but not a single company came out,” and not $50 million to $60 million.

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