Editor’s note: This is the ninth in a series of Q&As with executives of firms presenting at Venture 2003.Norak Biosciences is no stranger to the venture capital challenge, having already won two rounds of investment worth more than $16 million.
But the company is back for more, seeking between $10 million and $15 million to fund further drug discovery.
Norak is one of 23 companies preparing for presentations at Venture 2003, the Council for Entrepreneurial Development’s 20th annual venture capital event.
As it did a year ago, Local Tech Wire is featuring in-depth profiles of presenting firms built around a Q&A with a company executive as well as a Fact Box of important information. One profile will appear each day.
LTW put together a Q&A designed to not only produce facts about the presenters but also to give each a chance to state the case for venture capitalists to invest.
Ninth in the series was completed by executives at Norak.
Venture 2003 is set for April 22-23 in Chapel Hill.
Times are tough. If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
Platform technology (i.e., patented cell based bioassay) may become the preferred method for drug discovery in the field of G protein-coupled receptors (GPCRs), the best validated and most lucrative targets for drug discovery. (Norak has patented its Transfluor cell-based fluorescence bioassay technology.)
Seasoned management with positive track-record of starting and growing both public and private biotech and pharma companies.
Scientific founders widely regarded as the pioneers in GPCR research with intellectual properties that are state-of-the-art.
Internal GPCR-based drug discovery now ongoing with the potential to create enormous long-term growth and value.
Revenue now forthcoming via limited-access licensing to the industry, as a strong indicator of market acceptance and downstream opportunities for R&D collaborations, or strategic alliances.
What is the “pain point you address for your customers?
Transfluor appears to offer significant advantages over other GPCR-based assays, including:
- Universally applicable (i.e., useful with all known or orphan GPCRs)
- Compatible with modern high-throughput screening technologies
- Very quantitative (i.e., dose-response with primary screening)
- High sensitivity (i.e., low incidence of false negatives)
- High specificity (i.e., low incidence of false positives)
- High signal-to-noise ratio
- Easy and rapid assay development
- No reagents required
What makes your company unique? Do you have proprietary and/or patented technology? Please explain why it is unique and what the status is of any patent filings.
Transfluor is a cell-based fluorescence bioassay used to screen for GPCR ligands and other potential drugs that regulate GPCRs. It was discovered and patented by Marc Caron, Ph.D., Robert Lefkowitz, M.D., and Larry Barak, M.D., Ph.D. of Duke University, leading authorities in the field, and scientific founders of the Company.
Transfluor is based on their discovery that, upon activation by ligand binding, virtually all GPCRs rapidly undergo deactivation or “desensitization” by a common pathway. An early step in this pathway is the binding of the cytoplasmic protein arrestin to the activated receptor. Arrestin binding turns off the GPCR and initiates a process that brings the receptor into the cell where the ligand is removed before the receptor is recycled back to the membrane. By attaching a fluorescent label to arrestin, the recycling of the receptor-arrestin complex may be monitored. Since desensitization only occurs with an activated receptor, monitoring arrestin translocation within the cell provides a method to detect the activation of any GPCR. Using human cell lines genetically engineered to express both the labeled arrestin and the GPCR of interest, the assay can be used to screen for natural or synthetic ligands, whether agonists (receptor activators) or antagonists (receptor inhibitors).
Transfluor appears to offer significant advantages over other GPCR-based assays, including:
- Universally applicable (i.e., useful with all known or orphan GPCRs)
- Compatible with modern high-throughput screening technologies
- Very quantitative (i.e., dose-response with primary screening)
- High sensitivity and specificity (i.e., low incidence of false negatives)
- High signal-to-noise ratio
- Easy and rapid assay development and no reagents required
What makes your product (s) and/or services unique vs. your competition?
Three competitors in the GPCR discovery business would include companies such as Molecular Devices with their FLIPR assay, Aurora’s GeneBLAzer Reporter System, and Euroscreen’s AequoScreen assay. The first two focus on Calcium activation pathways that are many steps removed from the receptor-binding step that makes them subject to multiple interferences. The latter represents a similar process utilizing the Calcium binding to Inositol Phosphates, also subject to multiple interference pathways. Transfluor• is just one step removed from the initial ligand-receptor binding and has no opportunity for interference.
Does your company already generate revenue? If so, how much? Are you cash flow positive?
To provide for near-term revenue, as well as commercial validation of its technology, the Company is offering Transfluor® , on a limited basis, to third parties via licensing or screening collaborations. Major pharmaceutical companies, with in-house HTS programs and the necessary equipment, may license Transfluor® on a per-receptor basis. Other pharmaceutical and biotechnology companies may prefer to provide their GPCR targets for screening at Norak using their own compound library and/or Norak Biosciences’s compound library. The current market for GPCR based assays is approximately $150 million with an annual growth rate projected to be 10%. (Norak already has agreements with Astra-Zeneca Merck & Co., Inc Hoffman-La Roche H. Lundbeck A.S.)
What is your target market?
The market opportunity for GPCR-based human healthcare products is enormous. The ~200 known GPCRs (i.e., natural ligand and physiological function are known) account for nearly ¼ of the top-200 selling prescription medications, and worldwide revenue for GPCR-based drugs is estimated to be more than $65 billion annually. Importantly, there are ~150 so-called orphan GPCRs (i.e., natural ligand and physiological role not yet known) representing targets for the next-generation of GPCR-based drugs.
Since GPCRs are well conserved throughout the plant and animal kingdom, Transfluor® provides numerous other potential applications and business opportunities, including foods, beverages and cosmetics, veterinary medicines, agrochemical products, diagnostic applications and environmental biosensors.
What will you do with invested funds?
Additional funds will be used to further develop drug discovery efforts.
What do you want from an investor other than money?
Consulting Services, refinancing, acquisitions and other management services.
Why will investors be impressed with your management team?
The Company’s four senior executives are previously successful entrepreneurs, scientists and businessmen, with over 70 years of combined experience in starting and growing both private and public companies.
Roger Blevins, Pharm.D., Norak’s founding CEO, is former CEO, Medco Research, Inc. (formerly NYSE:MRE), which successfully developed adenosine (Adenocard® and Adenoscan®) for various cardiovascular indications, and was acquired by King Pharmaceuticals (NYSE:KG) in February 2000.
Carson Loomis, Ph.D., the Company’s Vice President, Research, and a scientific co-founder, is former co-founder of Sphinx Pharmaceuticals, Inc. (formerly NASDAQ: SPHX), a combinatorial chemistry company that was acquired by Eli Lilly in September 1993.
Terry Willard, Norak’s Vice President, Corporate and Business Development, has over 25 years of experience as a senior executive on the commercial side of the business at various companies, including American Hospital Supply Corporation, Baxter International, DuPont Merck Pharmaceutical Company, Sonus Pharmaceuticals, Medco Research, and King Pharmaceuticals.
Peter Heath, Norak’s VP Finance and CFO, is former VP Finance and CFO, MedTox Scientific (AMEX:TOX).
Just the facts on Norak: www.localtechwire.com/article.cfm?u=3876
