Magazine Article | April 15, 2011

Founded On Research That...'Brought The House Down'

Source: Life Science Leader

By Cathy Yarbrough

For Epizyme, a Cambridge, MA-based biopharma company established almost three years ago, 2011 is already a good year. In early January, the company announced it had forged a global R&D alliance with GlaxoSmithKline (GSK) to develop novel small molecule, epigenetics-based therapeutics against cancer and other diseases.

The alliance provided an undisclosed amount of funds to support Epizyme’s drug development  programs with GSK as well as an up-front payment of $20 million that will help the young company, with a staff of 30, to expand its platform, grow its pipeline, and advance other R&D projects that are not covered by the GSK agreement.

If the company succeeds in developing compounds that make it to the finish line (i.e. the commercialization of drugs against a defined set of targets outlined in its partnership agreement with GSK), Epizyme could be rewarded with as much as $630 million in total milestone payments. Additionally, Epizyme will be eligible to receive up to double-digit royalties on net sales of products resulting from the alliance.

In its partnership with GSK, Epizyme is charged with developing compounds that inhibit specific histone methyltransferases (HMTs), a subclass of the epigenetic enzymes that modify gene expression without tampering with the underlying DNA code. If any compounds are selected for further development, GSK will be solely responsible for the additional research as well as commercialization.

For Epizyme, the GSK deal means more than an infusion of cash. “Forging this significant collaboration with GSK has provided validation for our HMT-focused discovery platform and the HMT therapeutics targeted to genetically defined patient populations that have emerged from this platform,” says Jason Rhodes, executive VP and chief business officer at Epizyme and the former VP of business development at Alnylam Pharmaceuticals.

Gaining Investors’ Confidence
Epizyme focuses on the HMT subclass of epigenetic regulators because “ongoing cancer genome sequencing activities in the public domain have implicated HMTs as being causative in some forms of cancer,” explains Robert Gould, Ph.D., CEO and president of Epizyme. But, HMTs have not been the primary focus of the epigenetics R&D of biotech/pharma. “Initially, it was not clear to us whether these enzymes would be amenable to small molecule inhibitors, or whether we could convince sources of capital of the potential of this field,” says Rhodes, who was a founder of and partner in Fidelity Investments’ biotech venture capital group prior to joining Alnylam.

To gain the confidence and interest of potential investors and industry partners, a leadership team with a track record of biopharma R&D and business success was recruited by the company’s initial investors to staff the start-up and join its board of directors and scientific advisory board (SAB). Chairing Epizyme’s SAB since 2008 is Nobel laureate H. Robert Horvitz, Ph.D., of MIT. Epizyme was cofounded by Dr. Horvitz and Yi Zhang, Ph.D., whose description of his HMT research “brought the house down” at the 2007 retreat of MPM Capital’s medical and scientific advisory board, says Kazumi Shiosaki, Ph.D., managing director at MPM.

After the advisory board meeting, Shiosaki quickly orchestrated the financial backing to launch Epizyme in 2008. The lead investors were Kleiner Perkins Caufield and Byers as well as MPM Capital.

Shiosaki served as founding CEO of Epizyme, whose name reflects the juxtaposition of the two words, “epigenetic enzymes.” Dr. Gould, the current CEO, was among the leaders recruited for Epizyme’s board in 2008. Two years later, he left his then-current post as director of novel therapeutics at the Broad Institute of MIT and Harvard to join Epizyme full time. Prior to Broad, Gould held various leadership positions at Merck and was instrumental in bringing over 20 compounds from preclinical to clinical trials.

Enzyme’s board appointed Gould and the chief business officer, while Shiosaki selected the chief scientific officer, Robert Copeland, Ph.D. Before joining Epizyme in 2008, he was VP of biology at GSK’s Oncology Center Of Excellence In Drug Discovery.

Shiosaki also recruited the company’s VP of biological sciences, Victoria Richon, Ph.D., who came to Epizyme from the Merck Research Laboratories and was cofounder of the biotech company Aton, which has its epigenetics drug Zolinza marketed by Merck. “However, all the recruitment was done jointly with input from all the parties,” Gould points out.

The 10 members of the SAB were selected by Horvitz in consultation with Shiosaki and Enzyme’s board. “He very intentionally put together an SAB with experience that encompassed both basic research as well as drug discovery, in both academic and industrial environments,” says Gould. Each SAB member is an expert on a specific topic, such as cancer biology and animal models.

To boost its credibility as well as maximize its chances for success, Epizyme immediately licensed a large intellectual property estate produced in Zhang’s lab at the University of North Carolina at Chapel Hill. The estate covered a wide variety of chromatin-modifying enzymes, assay methodologies, and their potential use in treating an array of diseases.

“We have gone on to further expand that estate with both biological discoveries and, importantly, chemical matter discoveries,” says Gould. That estate now includes a proprietary chemical library of HMT inhibitors, two of which are the basis of Epizyme’s lead compounds that inhibit the HMTs named DOT1L and EZH2. DOT1L targets mixed lineage leukemia (MLL-rearranged leukemia), the most aggressive type of childhood leukemia, while EZH2 is active against certain non-Hodgkin’s lymphomas and breast cancer subtypes.

In 2010, Epizyme presented positive results about the inhibitors of DOT1L and EZH2 that were discovered in the company’s labs. In the Proceedings of the National Academy of Sciences, the company’s researchers reported data identifying the central role of mutant EZH2 in the pathogenesis of two types of genetically defined lymphomas. And, in oral research presentations at the 2010 American Society of Hematology annual meeting, company scientists reported that its small molecule inhibitor of DOT1L selectively kills tumor cells in vitro. They also revealed they used proprietary Epizyme compounds to inhibit DOT1L activity in in vivo models of MLL rearranged leukemia. Epizyme’s researchers were the first to demonstrate the small molecule’s activity in an animal model of cancer, Gould points out.

“Our focus on HMTs has enabled us to make rapid progress toward the discovery and development of HMT inhibitors,” he adds. “This focus is unique, and when combined with the accomplishments of the scientific advisory board and the leadership team, the experience of the board of directors, and the commitment of the investors, it creates a highly unique early-stage biopharma company.”

More Funds, More Interest
Epizyme also succeeded in raising additional funds in equity, partnership, and other nondilutive financing. In 2009, just one year after MPM Capital and KPCB provided the initial funding, Bay City Capital, Amgen Ventures, Astellas Venture Management, and New Enterprise Associates provided additional financing, thereby increasing the total venture capital investment in Enzyme to $54 million. In addition to the funding from the alliance with GSK, Epizyme’s coffers also include a $1 million grant from the Multiple Myeloma Research Foundation and a $750,000 award from NIH’s Qualifying Therapeutic Discovery Project.

In 2010, just two years after its founding, Epizyme was attracting the interest of big pharma, among which “there is a high level of interest in epigenetics,” says Gould. “Epizyme had a broad range of partnering conversations.”

Prior to its conversations with Epizyme, GSK had forged R&D partnerships in epigenetics with SuperGen and Cellzome and joined a public-private epigenetics collaboration that also includes the Wellcome Trust, NIH, and the University of Oxford. Like Epizyme, GSK views HMT inhibitors as a potent, new class of targeted therapeutics for genetically defined cancers. “That shared belief was a contributing factor to Epizyme’s working with GSK,” says Gould.

Epizyme and GSK agreed upon a specific set of HMT drug targets. Epizyme retains its two lead programs on DOT1L and EZH2, which are among 20 HMTs ranked as priority targets by the company based on disease relevance and commercial opportunity. Epizyme researchers evaluated all of the 96 HMTs occurring in humans.

“The partnership with GSK allows us to significantly increase the extent of our research activities and will result in an enormous expansion of proprietary biology and chemistry IP estate,” adds Rhodes. Epizyme will increase its 30-member staff to 40 by the end of 2011. “This growth will occur across all of our research functions, and we will expand our space in the first half of 2011,” he says.

The company will continue to use its network of CROs throughout the United States, Europe, India, and China because “it allows us to access key capabilities and capacity while limiting our fixed costs and burns,” says Rhodes. The CROs’ work is directed by Epizyme staff scientists experienced in managing teams and working with these organizations. “Much of the critical biological validation work is done within our own laboratories so that we maintain direct assessment of quality assurance,” explains Gould. In addition to chemical synthetic work, for which quality can be independently verified, CROs are used for animal studies including the analysis of absorption, distribution, metabolism, excretion, and pharmacokinetics (ADME/PK).

Singular Focus, Transparency, & Fun
The company’s success depends not just on its intellectual property, staff, and board leadership, says Gould. Critical success factors also include the company’s singular focus on only two of the 96 HMTs; a corporate culture of “transparency, intensity, scientific rigor, and fun;” and a hypothesis-driven approach to drug discovery. “That belief and commitment are vital,” Gould says about this approach.

Also vital are the company’s project teams. “We are a small-molecule drug discovery company, an endeavor that requires teams of people working together. Thus, researchers in the company are organized into project teams with clear objectives,” Gould says. Each project team focuses on a specific R&D task to advance the pipeline. In addition, the SAB is organized into specific working groups that interact directly with Epizyme scientists and “outside of the formal board meetings to provide insight, guidance, and leadership to the scientific activities of the company,” he notes.

The corporate culture at headquarters is the responsibility of the Epizyme Leadership Team (ELT), Gould’s term for top management. ELT helps promote transparency by holding weekly companywide staff meetings at which Gould answers questions. “In 30 minutes, scientists give scientific highlights of the week, the business development group gives BD (business development) highlights, any infrastructure issues are identified, and employees hear from each other on the most exciting things going on,” he says.

The Epizyme Fun Team (EFT), which is charged with creating and nurturing the culture of the company and is made up of scientists within the company, organizes twice-monthly Friday afternoon “Happy Hours,” staff birthday celebrations, an annual staff and family Christmas clambake at the CEO’s home, an annual February “winter holiday party,” and periodic candlepin bowling and pizza get-togethers. Also, “The Epitones,” a band of Epizyme staff, plays at many EFT events. With all of the positive momentum that has characterized Epizyme’s evolution thus far, it’s likely the Epitones won’t be playing the blues in 2011.

Used with permission from Life Science Leader magazine.