Employee No. 1: Doug Williams launches exosome R&D player Codiak Bio with $80M-plus

Doug Williams--Courtesy of Josh Levine

Doug Williams is now happy to reveal just why he stepped aside four months ago as R&D chief of Biogen ($BIIB). Last summer, Williams signed on as "employee number one" of Codiak BioSciences, which now has an $80 million-plus commitment from some prominent early-stage investors to launch a quest into the role exosomes can play in treating cancer--and a wide variety of other diseases.

It's early days yet for Codiak, with a core team still being recruited as Williams lines up a permanent location in Cambridge, MA, where he will work with co-founder Eric Lander, the president of the Broad Institute of Harvard and MIT. 

Williams says that despite the nascent stage of the field he's working in, a new therapeutic program can be in the clinic next year as the company begins to find its way on the partnering front.

"The field has really evolved a lot over the last few years," Williams says about exosomes.  "People thought (exosomes) were a mechanism cells used to get rid of their trash." 

Exosomes are vesicles, small structures inside a cell that are released by virtually every cell in the body, says Williams. They can establish a microenvironment locally or travel through the body, delivering instructions from one cell to another and behaving "very much like a virus."

Williams is working with the preclinical animal studies that Raghu Kalluri has done at MD Anderson in Houston. The scientist has focused on using exosomes to deliver a payload--Williams isn't saying which one for now--that can be used to down regulate pancreatic cancer, stopping the spread of the cancer in mice. There are broader therapeutic goals to go after, as well as potential for new diagnostics.

MD Anderson--which has been busily spinning out new biotechs--signed off on an IP license and a sponsored research agreement, keeping the big cancer center directly engaged in the R&D work ahead. Arch Venture Partners and Flagship, which explored exosomes' potential in its VentureLabs, stepped in to lead the round. Fidelity Management and Research Company, the Alaska Permanent Fund and Alexandria Venture Investments also stepped in to provide the $80 million-plus startup cash, which is slated to arrive in tranches as the company winds through the first few years.

Williams has had a long and successful career in biotech, helming ZymoGenetics when it was sold to Bristol-Myers Squibb ($BMY) for close to $1 billion. And his 5-year stretch at Biogen included developing the game-changing MS drug Tecfidera. Biogen arced high in recent years, but within weeks of Williams' departure the company was suddenly hit with an unexpected erosion in its revenue that prompted a dramatic reorganization, which includes laying off some 880 staffers while eliminating part of its R&D efforts.

Williams enjoyed his success at Biogen and says he isn't all that surprised by the setback on the financial front, or the fact that CEO George Scangos and his team swiftly restructured in the face of it.

"It's one of the things that companies have to do periodically," Williams says, adding that he's confident in the company's longterm R&D focus on Alzheimer's and multiple sclerosis. But one thing he wants to make clear is that his move to a startup was a choice based on an opportunity to start a biotech from scratch. That's a brand-new challenge that he's clearly relishing.

"I decided to go to Codiak," says Williams. "I didn't decide to leave Biogen."