With so many promising drugs falling down in the clinic for safety reasons, new efforts to conduct early predictive testing would be invaluable to the industry.

That's what CeeTox Inc. CEO Jim McKim thought, when he and three other colleagues formed the specialty research lab in June 2003. Though it operates as a typical contract research organization, CeeTox's services are more specific, focusing primarily on in vitro toxicity screening of potential drug candidates and chemicals.

"One of the big problems in the pharmaceuticals industry is the loss of promising new drugs late in development," McKim said, "when they are either in mandatory animal testing or clinical trials, or even post-marketing, because of a small population effect in humans."

Whitehouse Station, N.J.-based Merck & Co. Inc.'s COX-2 inhibitor, Vioxx, was the most notable market withdrawal in 2005, when it was pulled from shelves after data showed cardiovascular risks. Also last year, the makers of the multiple sclerosis drug Tysabri halted sales and clinical trials following reports of a possible link between the drug and a potentially fatal brain disease. After reviewing safety data, Cambridge, Mass.-based Biogen Idec and partner Elan Corp. plc, of Dublin, Ireland, resubmitted a new drug application for Tysabri in September. (See BioWorld Today, Sept. 28, 2005.)

But many other drugs don't even make it out of preclinical testing, McKim said, adding that "on average, about 60 percent of all new drugs entering animal trials will fail because of toxicity."

CeeTox aims to improve the probability of clinical success by providing early predictive data using a biochemical process and a whole systems biology approach. The company began by evaluating 10 different parameters in a cell to see how a drug or chemical affects it at a range of dose levels and at different times.

"We took all that information and compared it to historical animal data to find out how well our in vitro systems were predicting what was happening," McKim told BioWorld Today. "From that, we developed an algorithm, a way to process or analyze large amounts of data to come up with a blood value in the rat 14-day repeat-dose model that would be toxic.

"That's a huge change in the in vitro testing arena, because now we're building a bridge from the cell right to the animal that's highly predictive," he said. "It means you can evaluate large numbers of new drug candidates very, very early, and optimize them not only for desired effects - potency, efficacy, target specificity - but also for safety."

CeeTox's testing boasts an 85 percent accuracy rate, and costs significantly less than typical animal studies. To run five compounds through a rat study, companies can spend more than $1 million, but CeeTox can test those same five compounds for about $30,000, McKim said.

"And we don't just generate numbers about whether something is killing cells or not," he added. "We generate interpretive data so that people can actually make decisions on the information we're giving them."

That way companies can decide how many of those five compounds are worth taking through animal studies.

Speed also is an advantage with CeeTox's approach. McKim estimates that it takes about two weeks to get data. The company has been improving and perfecting that platform over the past two years and is working mainly with small and mid-size biotech firms across the U.S. and overseas, though "we're growing pretty rapidly," McKim said.

The advantages of having early toxicity data are obvious. For biotech firms, which already invest millions in designing a drug and validating a target, having that extra safety information could add value in partnering discussions. Firms "could take their new drug along with a safety package from CeeTox," McKim said, "and that product would be worth a lot more to the big pharma companies."

Firms preparing to in-license compounds also could benefit from a little predictive data, and many of CeeTox's clients contract its services before adding early stage candidates to their pipelines.

CeeTox is based in Kalamazoo, Mich., the home of the predictive toxicology unit of Pharmacia Corp., where McKim and the other founders worked before Pharmacia was acquired by New York-based Pfizer Inc. in mid-2002. Pharmacia's research and development work later was transferred to another facility, but "we wanted to stay in Kalamazoo," McKim said.

A $200,000 investment from CeeTox's founders helped start the company, along with $275,000 in angel funding and $400,000 in grants. That money included $200,000 from a Michigan economic development corridor grant. Then, in May of last year, the company sold 51 percent of its ownership to an undisclosed Toledo, Ohio-area firm, which "stabilized our cash flow and gave us farther reach," McKim said.

Since its inception, CeeTox has grown from four to 13 employees, and has doubled its office and lab space to nearly 4,000 square feet.