Emerging Drug Developer: Alios BioPharma

Alios sets sights on new, improved interferon molecule

A fledgling South San Francisco biotech believes it's started down a scientific trail that could lead directly to a new and improved interferon molecule.

"The lead program is a hyperglycosylated interferon molecule," says Lawrence Blatt, PhD, the CEO of Alios BioPharma. "That was a program that I had developed myself and that was the basis for starting the company."

Interferons were cloned and expressed all the way back in the ‘80s, says Blatt. But they had a short half-life and patients needed to be treated frequently. Pegylated interferons offer a big breakthrough, with less frequent dosing. The new approach improved the pharmacokinetic properties of interferons and also lowered their biological potency.

"But I think there's room for improvement," says Blatt.

According to Blatt, the chief scientific officer at InterMune from '02 to the middle of ‘08, Alios' program has the potential to become a best-in-class therapy for hepatitis C. The biotech company is working on an advance that it hopes will allow for weekly dosing without any loss of biologic potency. Alios also licensed in a program from the Cleveland Clinic that focuses on blocking viral replication and stimulating production of Interferon.

And Blatt now has the money to put his work to the test.

Alios raised $24 million in a Series A that was completed at the end of '08 and announced last week. Of that, $8.4 million was provided in cash with the rest to be turned over in tranches as the company progresses. Novo Ventures and Novartis Ventures led the round with participation from the Roche Venture Fund. Jack B. Nielsen, Novo Ventures, will serve as its chairman. Also joining current members Raymond F. Schinazi, Ph.D., D.Sc. and Blatt on the Alios Board of Directors is Campbell Murray, M.D., Novartis Ventures. Carole Nuechterlein, Roche Venture Fund, will sit as an observer.

That's enough money to gain proof-of-concept data, says Blatt, who's reluctant to say right now just when researchers can expect to get into the clinic.

Blatt first got Alios started with angel financing in 2006 and has since grown the company to 11 workers. He now plans to add a few bench scientists to the payroll and is quick to acknowledge that he couldn't have picked a better time to recruit new talent.

"There have been a lot of layoffs in the Bay Area, he adds, "and there's a wealth of fantastic candidates."

It's obviously early days at Alios, but Blatt clearly would like to build the developer into a player in the biotech field.

"We're not building the company to sell it," he says. But, "if it happens to get bought in the future, that might be an option."

A few years from now, the markets may be open to a public offering. But that fork lies well down the road.

As Blatt notes: "You don't know what market conditions will be like in three years."

Emerging Drug Developer: Alios BioPharma
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