Stuart Peltz, Ph.D., was very satisfied with his life as a tenured professor at the University of Medicine and Dentistry of New Jersey (UMDNJ). He had spent most of his professional career studying the effects of post-transcriptional RNA (ribonucleic acid) control (all the regulatory events that take place after an RNA molecule is made) on the regulation of gene expression and protein synthesis. However, by the late 1990s, after studying RNA biology for 20 years, Peltz was convinced he could effectively use post-transcriptional regulatory control targets to identify new treatments that might provide therapeutic benefits to a wide variety of patients — especially those with rare genetically inherited diseases like cystic fibrosis (CF) and Duchenne Muscular Dystrophy (DMD). This prompted him to leave his life as a tenured UMDNJ professor and start Post-Transcriptional Control Therapeutics (PTC) in 1998.
PTC was founded to identify and commercialize small molecule drugs that work at the post-transcriptional level to modify protein production in a variety of therapeutics areas including oncology, infectious diseases, and orphan diseases. And after 13 years of R&D, the company is very close to realizing its goal. Currently, the South Plainfield, NJ-based company employs 175 people. Approximately 100 employees are involved with drug discovery, and the remainder are tasked with drug development, commercialization, and company management. Unlike most biopharmaceutical companies started in the late 1990s, PTC is privately held and still led by Peltz, its co-founder and CEO.
Raising $550 Million In Financing
While Peltz did not have any formal business training or experience in the private sector before starting PTC, he learned very early in his academic career to seek out smart and talented people who possessed the knowledge and skills to achieve his goal and aspiration of building a fully integrated biopharmaceutical company. “Also, I am a good listener and a quick learner,” he adds.
It appears that Peltz’s listening and learning skills and his penchant for smart people has paid off. During the past 13 years, he and his carefully assembled management team have raised over $550 million in financing for the company. Peltz is quick to point out that only $183 million was from venture capital and private equity sources, and the lion’s share was from research collaborations and licensing deals ($259 million) and grants from nonprofit foundations and from patient advocate groups ($118 million). Some of these include the National Institutes of Health, the FDA Office of Orphan Drugs, the Wellcome Trust, the Cystic Fibrosis Foundation, the Muscular Dystrophy Association, and the Spinal Muscular Atrophy Foundation.
An Unusual Approach To Identifying Therapeutic Targets
On the surface, PTC resembles many other biopharm companies that started out as platform technology developers. However, early on Peltz used a somewhat unconventional approach to identify therapeutic areas where PTC technology platforms could possibly make a difference. “In the early days, Claudia Hirawat, senior VP of corporate development, and I visited a large number of patient organizations to understand the best opportunities to apply PTC’s technology to a particular disease, explains Peltz. This led to our current emphasis on developing small molecule drugs for orphan and ultra-orphan indications, including DMD, CF, and SMA (spinal muscular atrophy). I thought from the outset that our technology platforms could be universally applied to discover novel molecules for these indications, all of which currently have limited or palliative treatment options.”
Peltz’s initial plan for PTC was to build a variety of discovery platforms and use an empirical approach to determine the best way forward for the company. In other words, “Anything that worked well as a discovery tool, we advanced, and things that did not perform well were quickly abandoned,” offers Peltz. While his initial thinking was to exclusively rely on PTC’s internal R&D activities to bring new drugs to market, Peltz quickly learned the changing economic conditions in the early 2000s would not permit him to execute this strategy. “Things were tough back then; there was not as much VC available, and an IPO was no longer a viable option to capitalize a company. This forced us to reconsider how we were going to advance our drug candidates and ultimately ensure the financial future of the company,” says Peltz.
Big-Name Licensing Deals And 3 INDs
Luckily, the promise and novelty of PTC’s drug discovery platforms were sufficient for Peltz and his management team to convince some of the world’s leading pharmaceutical and biotechnology companies like Pfizer, Merck, AstraZeneca, Genzyme (now Sanofi-Aventis), Gilead, Roche, and Celgene to enter into licensing deals with the company. These revenues plus copious funding from government agencies and nonprofit sources ultimately provided sufficient capital for PTC to develop three novel and proprietary drug discovery platforms that include: 1) Gene Expression Modulation by Small Molecules (GEMS); 2) nonsense mutation suppression; and 3) an RNA alternative splicing discovery platform.
To date, the GEMS and nonsense mutation discovery platforms have yielded three investigational new drugs (INDs), two in mid- to late-stage clinical development. These drugs include the company’s lead product, ataluren (formerly PTC124) to treat CF (Phase 3) and DMD (Phase 2b), and PTC299, a vascular endothelial growth factor (VEGF) inhibitor (Phase 1/2) being tested in multiple oncology indications. The third candidate — an orally bioavailable treatment for Hepatitis C virus infections — is in preclinical development. Most recently, PTC entered into a potential $460 million licensing deal with Roche to use its RNA alternative splicing discovery platform to identify a small molecule drug to treat SMA, a genetic neuromuscular disorder (for which there is no current treatment) that causes muscle weakness in one out of 9,000 children born in the United States.
“While working on orphan diseases is very rewarding, it is also very challenging,” offers Peltz. “In the beginning we didn’t really understand how much pioneering work would be involved with developing new drugs to treat these diseases.” To that point, PTC had to pioneer a new clinical outcome measure for patients with DMD — the 6 minute walk test — to assess whether its leading drug candidate ataluren provided any therapeutic benefits to patients suffering from the disease.
As anticipated, results from Phase 2b clinical trials showed that ataluren improved the performance of patients with DMD in the 6 minute walk test by 30 meters. Because of PTC’s pioneering efforts, many companies now targeting DMD have adopted the 6-minute walk test as the standard to evaluate their new treatments. “Looking back, I think that the real keys to our success were working closely with nonprofit foundations and patient advocacy groups and identifying populations of physicians committed to finding new treatments for their patients,” says Peltz.
Beyond Orphan Drugs Means A Search For Partners
Although PTC’s current emphasis is on orphan disease drug discovery, Peltz understands the need to expand the use of the company’s discovery platforms into other therapeutic areas. To that end, the company has active internal discovery programs (mainly grant and business development driven) in antibacterial drug discovery, stem cell research, oncology, and several undisclosed indications. However, Peltz is quick to point out that PTC does not intend to bring these new products to market by itself. “The plan at this point is to advance these programs into safety/toxicology studies or early-stage clinical development and then look for partners interested in helping us commercialize them,” he says.
Despite his lack of formal business training, Peltz’s transition from academia to the private sector was not a very difficult one. “I was always very goal oriented and entrepreneurial, so I tended to run my laboratory at UMDNJ like a small business. This mindset greatly aided my transition from academia to industry,” he says. Further, Peltz opines that his successful transition was likely a result of his ability to freely admit to others that he does not know everything, an attitude which is very uncommon among academics, who tend to avoid that admission at all costs. Also, unlike many academic scientists, he is not afraid to surround himself with talented people with strong personalities who, similar to him, are opinionated and willing to argue, at any cost, for what is in the best interest of the organization. “I think to be a successful CEO you have to be transparent, extremely flexible, and open to any or all business opportunities that are in the best interest of moving the company forward,” offers Peltz.
Yet despite his extraordinary fundraising skills and research accomplishments, Peltz understands that his position as PTC’s CEO can never be guaranteed. “I am always looking for new investments and business opportunities to keep the company moving in the right direction. It never really ends; no matter how much progress you think that you are making,” he says. And while PTC is developing pretty much the way Peltz thought it might when he decided to start the company back in 1998, he is keenly aware that the company will never be considered a success until it has approved products on the market and is able to turn a profit.