Editor’s note: BioWatch is a regular feature on Fridays.In mid-May, the Muscular Dystrophy Association (MDA) plans to film a segment about the research of UNC-Chapel Hill spinout Asclepios. It will air on this year’s Jerry Lewis telethon for the disease.

Asclepios recently received a $1.5 million grant from the MDA, the largest supporter of research to treat neuromuscular diseases. The company’s viral gene-delivery technique has shown some success at replacing a missing gene that causes some MD.

Life Sciences Law attorney Sheila Mikhail, chief executive officer of Asclepios, tells LTW the MDA says if the company can find matching funds it will be more committed to long term support of its research. She says the funds may come from angel investors or pharmaceutical partners.

She explains that the company is working with the MDA to explore ways investors might be able to receive “some sort of charitable deduction” if part of the investment is to the Association. That, Mikhail says, could give some investors a 40 percent return immediately if they’re in a high tax bracket.

Mikhail, who was a management consultant prior to becoming an attorney and heading her own growing law firm specializing in representing life sciences companies, assumed the CEO role at Asclepios to keep the company alive.

New genes for old

“It’s really hard to find management when you have no money,” Mikhail says. “They essentially have to bankroll themselves. You need a lot of confidence you can pull things off, because if you can’t get funding you’ll never recoup.”

In the case of Asclepios, Mikhail says, “I thought the science was too good to let the company fail, so I stepped in. Right now my skill-set is perfect. I’m making deals.”

Named after the Greek God of medicine, Asclepios is based on the viral gene-delivery research of founder R. Jude Samulski, a Ph.D. in virology and director of UNC’s gene therapy center and his colleagues. The research was funded by a total of about $12 million in National Institutes of Health grants.

Samulski says the new gene delivery method evolved from 20 years of study of the only human DNA virus that is non-pathological. Although people are exposed to the virus when they’re about 2 years old, they don’t get sick. Called the adeno-associated virus (rAAV), it was found in the 1960s when researchers sought the infectious agents causing colds and other diseases.

Samulski says the virus “has a unique biology for gene delivery.” The virus, in addition to being non-harmful, enters a cell and stays there for the life of the cell, expressing the inserted gene it carries. The UNC researchers used the virus to insert a gene into a hemophiliac dog where it continues to work after more than three years.

The UNC researchers further modified the virus to make it even more useful. It can be applied to numerous diseases where gene therapy is an option.

Safer Method

Mikhail says the method is safer than other gene therapy delivery techniques. She also says it would be a loss to society not to pursue such a promising treatment for disease like MD, which kills its young male victims in their mid-20s.

Mikhail says that she’d like to rename Asclepios, because the Greek God of medicine may be metaphorically appropriate, but it is impossible for most people to spell.

She says her law firm’s large pharmaceutical clients pay the bills so she can devote time to its sometimes struggling startups. “I’m the first angel investor in some of these companies,” she says.

She notes that her law firm hires people with business MBAs and business development skills. “We’re not just paper pushers,” she says.

Eventually, Mikhail says, if the company grows to 50 people or gets venture funding and backers want different management, she’d step aside, but she’s comfortable running the show until then.

Initially, she decided to see the non-dilutive funding from the MDA and/or other sources to validate the company’s technology. Continuing to develop the science and focusing on one disease was intentional strategy. “We couldn’t spend a year knocking on doors looking for money in this economic environment,” she says.

Next, the company hopes to do a collaboration deal with a large pharmaceutical partner that could be worth tens of millions of dollars. “Then I’ll have to go raise seed funding,” she says.

Biotech at Venture 2004

The increasing number of biotech startups in North Carolina was evident again this year at the Council for Entrepreneurial Development’s Venture 2004 Conference this week.

Biotech and medical device startups accounted for half the companies presenting to investors.

One of the more striking exhibits the second day was DarPharma’s impressive looped video showing an ape go from nearly unconscious acute alcohol poisoning to lively cage rattling after treatment with a dopamine D agonist.

DarPharma, founded in 2001, says its therapies based its technology may treat a variety of central nervous system disorders. Its two lead compounds are aimed at treating late-stage Parkinson’s and negative symptoms of schizophrenia.

The company is chasing a $25 million B round and expects to enter clinical trials later this year.

Also, in the biotech isn’t just for people department, Greensboro-based Piedmont Pharmaceuticals had its first commercial product on display. Called “Serene,” the product kills the flies that breed in horse manure.

Considering that one horse breeds 27,000 flies a day, a farm with ten horses has to contend with a quarter million flies daily. Serene kills 100 percent of horse flies and 95 percent of stable flies, Piedmont says. The product costs about 70 cents a day per horse.

The company’s first product for humans, a non-insecticide treatment for head lice effective against even resistant strains is called Resultz. Piedmont completed Phase II studies of the treatment and hopes for regulatory approval early in 2005.

Life Sciences Law: www.lifescilaw.com

Piedmont Pharmaceuticals: www.piedmontpharma.com

DarPharma: www.darpharma.com