With Biogen Inc. veteran Doug Williams at its helm as founding president and CEO and a scientific platform from the University of Texas MD Anderson Cancer Center powering its engines, Codiak Biosciences Inc. collected the first installment of a combined series A/B financing that's expected to exceed $80 million. Arch Venture Partners and Flagship Ventures served as co-lead investors in collaboration with MD Anderson to launch the Cambridge, Mass.-based company. Fidelity Management and Research Co., the Alaska Permanent Fund and Alexandria Venture Investments also participated in the initial round.

Codiak is leveraging foundational research on exosomes – membrane sacs, or vesicles, released by both healthy and cancerous cells – to create drugs and diagnostics that initially will target cancer and, in particular, pancreatic cancer.

The company came together through the convergence of longstanding relationships and serendipitous timing.

In Boston, Flagship Ventures, through its Venturelabs unit, was pursuing therapeutic applications of exosomes and had amassed an intellectual property (IP) portfolio of internally developed patents that were held by a Venturelabs newco dubbed VL27. Jan Lotvall, professor in the department of internal medicine and chairman of the Krefting Research Centre at the University of Gothenburg in Sweden, was serving as an advisor to the company. A longtime researcher in the field, Lotvall published a seminal paper in 2007 describing the cell-to-cell transfer of nucleic acids via exosomes. The foundational IP related to his work was subsequently acquired by VL27.

Meanwhile, Arch was working with MD Anderson researcher Raghu Kalluri, professor and chairman of the institution's department of cancer biology, on a potential spinout. Earlier this year, Kalluri's lab published a discovery that could provide the key to developing a blood test – the long-sought liquid biopsy – that detects the presence of pancreatic cancer in the bloodstream at an early stage.

The study, published in Nature, showed that a protein present on cancer exosomes was found in the blood of pancreatic cancer patients but not in the blood of healthy individuals or those with chronic pancreatitis.

Steve Gillis, managing director at Arch, reached out to Williams, a friend and colleague since Gillis recruited him to Immunex Corp. in 1987, and asked him to look at the data from Kalluri's lab, initially on the diagnostic applications.

"I was sufficiently intrigued to do a little homework and learn more about exosomes," Williams told BioWorld Today. "The more I learned, the more interested I got, and as the conversation progressed it was clear there was another side to the story beyond diagnostics."

Kalluri and colleagues also showed that exosomes derived from normal cells can act as a potent and safe delivery system for multiple therapeutic payloads. The full body of work with exosomes includes discoveries related to identification of double-stranded genomic DNA, exosome microRNAs and their biogenesis, exosome proteins, identification of cancer-specific exosomes and exosome-mediated therapies.

Codiak's scientific underpinnings offered the opportunity "to develop a very important new approach to developing drugs," Williams said.

Flagship learned of Kalluri's work through its close working relationship with Eric Lander, president and founding director of the Broad Institute of the Massachusetts Institute of Technology, where he serves as professor of biology, and Harvard University, where he is professor of systems biology at Harvard Medical School. Lander knew Kalluri, who had served as professor of medicine and chief of the division of matrix biology at Harvard Medical School, along with several other appointments. Kalluri left Harvard in 2012 for MD Anderson.

In short order, the teams began talking about combining their efforts.

"All the parties came together, and we decided jointly to build a much, much bigger platform than would have been likely if we did this separately," said Noubar Afeyan, Flagship's founder and CEO. "This is a potentially disruptive advance in terms of applying exosomes both for diagnostics and for therapeutics."

'THE ERA OF INCREMENTALISM IS OVER'

Each of the participants plays a role in the new company. In addition to Williams in the CEO's seat, Gillis will serve as the chairman of Codiak and Afeyan will serve on the board. Lander, a co-founder, also will join on the board. In association with the formation and financing of Codiak, VL27 was merged into Codiak, and Lotvall will continue in an advisory role to the company.

The company also executed license and sponsored research agreements with MD Anderson. The full package of assets "makes for a very compelling and strong story on both the diagnostic and therapeutic side," Williams said.

A seasoned biotech exec, Williams had a decade of leadership at Immunex and also served as chief scientific officer and executive vice president of research and development at Seattle Genetics Inc. and senior vice president at Amgen Inc.

In 2004, Williams joined Zymogenetics Inc. as chief science officer and head of research, eventually moving up to the CEO. He was in charge when the Seattle-based company was acquired in 2010 by Bristol-Myers Squibb Co. for $885 million. (See BioWorld Today, Sept. 9, 2010.)

Williams joined Biogen in 2011 as executive vice president of research and development and stepped down in July to take the helm of then-unnamed Codiak.

The new company already holds "really compelling proof-of-concept data" in animal models of pancreatic cancer – most of it not yet published, according to Williams.

"That will be the initial direction for the first clinical study," he said. "It's also the initial direction on the diagnostics side, so there's a bit of linkage on the pancreatic cancer story."

Beyond pancreatic cancer and other tumor types, Codiak can move the technology in any number of potential directions, including tissue regeneration and repair, remyelination, vaccines and infectious diseases.

"It's a burgeoning field," Williams said. "A lot of it is preclinical at this point, opening the doors to move into different therapeutic areas."

Pancreatic cancer rose to the top as the highest unmet medical need, and Williams aims to achieve key milestones in both the diagnostic and therapeutic sides of the house in 12 to 24 months.

"In the last couple of months, as the company's been in stealth mode, we've been trying to refine our work plan scientifically," he said.

On the diagnostics side, the likely first effort will be a high-throughput test to allow for screening of a substantial number of patients by targeting Glypican-1, a marker found on the surface of pancreatic cancer cell exosomes.

"It looks like a very good marker for early detection and, potentially, for post-treatment monitoring of patients with pancreatic cancer," Williams said. "But we don't yet know how broad that marker is beyond pancreas."

On the therapeutic side, Codiak aims to initiate a clinical study in pancreatic cancer at MD Anderson next year.

"The hope is that we can replicate in man the very impressive data that's been seen in a variety of animal models," Williams said.

The company currently has four employees but expects to have 20 to 30, and an operational lab, by the end of next year. Long term, Williams expects Codiak to grow into a fully integrated drug discovery and development company, although he admitted it's a little early to determine exactly how that road map will play out.

"I think it's likely that we will have some partnerships along the way," he said. "That's the normal course of business for young start-up biotechs, but we do expect to build a really great company for the long term, which will involve trying to hang on to substantial commercial rights in one or both areas."

If the science opens as many doors as the founders anticipate, "our biggest task will be to maintain some focus and make sure that we move things along properly," Williams said, emphasizing the importance of targets such as pancreatic cancer in driving Codiak's agenda.

"The era of incrementalism is over," he said.

The initial financing gives Codiak the bandwidth to move aggressively on the therapeutic side and to open a new frontier in cancer drug development, Afeyan agreed.

"Exosomes have been described in the literature and studied for many years," he told BioWorld Today. "It's one of these technologies which is at once old and new. People have been aware of what they called microvesicles for some time, but there's been this usual tendency in biology to discount what people couldn't understand or characterize. As the techniques to analyze these have improved, we're now beginning to appreciate just how prevalent they are in healthy humans and in the disease process. That opens up a whole set of new possibilities."