One Drug's Journey

your host, Michelle fay Cortez. This week, we're hearing the story of the strange, circuitous path of one drug from the Eureka moment to the market. It's a story about a Nobel Prize winner, cutting edge genetic research, billions of pharmaceutical dollars, and of all things, a worm. In August, all Nylum, a seven billion dollar biotechnology company, one approval to market its first drug. The company hopes it will save the lives of roughly fifty patients who suffer from

a rare and ultimately fatal disorder. But the price sounds outrageous. Beach patient, or rather the federal government and their insurance companies, will have to pay about three forty five thousand dollars every year. Here's Rebecca's Balding, Bloomberg's Boston Biotech Reporter on the sixteen year journey of a single drug. I'm here in Cambridge, Massachusetts, the global capital of the drug industry.

As a pharmaceutical executive told me recently, what New York is to finance and Paris is to culture, Cambridge is to science. Its heart is a place called Kendall Square, next at M. I. T. Kendall Square used to be a rundown neighborhood full of empty candy factories. Now the neighborhood is full of gleaming buildings and companies with names that suggest scientific expertise and mystery genzyme biogen voyager. Their

market values are usually counted by the billions. When you're walking around the streets, you get the feeling that people hidden behind glass walls are making decisions about the future, possibly your future. Al Nylum is one of those companies. All Nylum is named after the center star in Orion's belt, the brightest in the constellation. It's a fitting metaphor. Al

Nylum is the platonic ideal of a biotech company. Sixteen years ago, a group of scientists here wanted to take an obscure insight about genetics and turn it into a drug. This is the story about that drug, but it's also a story about the biotech industry itself and what happens behind those glass walls and it all be I'm back in the late seventies when a story in the Washington Post piqued the interest of a high school student named

Craig Mellow. Today, Craig is fifty eight years old. I spoke to him on the campus of the Massachusetts Medical Center in Worcester, where he runs a genetics lab. I don't really know what to call Craig. My producers tell me first names worked better for podcasts, But the reality is Craig has a Nobel Prize. But Dr Mellow doesn't sound right either. Craig is tall and athletic, with long gray hair. I would pay him more as an enlightened

surfer pondering the universe than a celebrated molecular biologist. Here's what started his interest in genetics. I got really fascinated by genetics when I learned that the human insulin gene could be expressed in bacteria that you could actually take the human gene for insulin, put it into bacteria, and the bacteria could make the human insulin protein. And I read that in the Washington Post and I said, you know,

that's been to myself. That's incredibly powerful. Most people didn't know it yet, but that discovery was the biotechnology industry's big bang, the moment that would change medicine forever. Researchers had shown that could make insulin a human hormone in a lab. Here's why that's such a big deal. Most medicines before then had been simple chemicals. Truth be told, many of them didn't even work that well. Synthetic insulin was one of the first medicines made from human cells,

and it worked beautifully. Diabetics who had previously relied on insulin made from pigs and cattle finally had the real thing. It was also an innovation that made Craig want to go into medical research. Yeah. I always was interested in the history of life and fossils, but the genetic information inside of every cell in our bodies is a living fossil, I'd say. I was so intrigued by the fundamental quest gens of origins, even if it weren't applicable to anything.

I think it would be really fascinating and important to try to understand this. But of course it turns out that by understanding fundamental mechanisms of of biology, we can make really important medicines like insulin. Craig decided to study DNA specifically how he might be able to tinker with it. Put simply, DNA as our body's blueprint, the master code that lays out all of its processes. But it's just the blueprint. To actually create life, you need a builder

and raw materials too. That's where a molecule called ribonucleic acid or RNA comes in. If you're wondering what any of this has to do with developing a drug, specifically al Nylums drug, stick with me. But first let's go over some basic molecular biology. It's really simple, I promise. If DNA is the blueprint, RNA is the contractor that gets hired to actually build the building. It reads the architect plans and carries them out. In this scenario, Proteins

are the equivalence of brick or drywall. Proteins are what the body is actually made up of. They make up your hair, your eyes, your heart, every cell. RNA is what creates them by reading the DNA's code and turning that code into proteins. Most of the time this goes well, except when there's an air in the blueprint. Defective DNA turns into defective proteins, which in turn caused disease. And in all of these cases, even though DNA has an error, the RNA still repeats it. An error in one protein

may sound benign, but it's not. It's what causes disease. That's why tinkering with DNA was so allerting for researchers. If scientists like Craig could figure out how to change the blueprint, they could prevent disease. That's key for later on in the episode when we'll hear about how this drug was actually developed. But back when Craig was first tinkering, he was about as far as you could be from

developing a drug for human beings. For his experiments, Craig worked on worms, yes, worms, specifically a species known as C. Elegants. It's a favorite creature among genetic researchers because it's so simple. It only has about a thousand cells humans have thirty seven trillion. It's tiny only about one millimeter long and transparent. You can see through all those cells under microscope. Despite its small size, it has a nervous system. That's key.

The hope is that discoveries made on these animals might also work in people. Craig had always been interested in changes in DNA, but when he started his scientific career after grad school, something surprising happened. Other researchers around the country were experimenting not on DNA but on RNA. They were getting strange, even inexplicable results. Craig decided to try it for himself. I discovered some really weird things were happening,

really really awful, but weird. When Craig injected his worms with DNA, he would have to inject them into the worm's reproductive organs. Genetic changes would then appear in the next generation and its children. But if he missed and accidentally injected the DNA into a worm's gut, nothing would happen. There wouldn't be any changes in that worm where his children. The DNA would just degrade disappear. But with r n A, Craig could inject the worm anywhere, even in the gut,

and it would still have an effect. What was even stranger was that these effects were so strong and only would it last through that animal's life, but it would pass on to the next generation. Craig didn't know why that would be. All he knew is that that shouldn't be happening. He decided to call his longtime collaborator, Dr. Andrew Fire. It was very surprising, and I, of course I was very very interested in, you know, how that could be happening and it. I called up Handy and

we spent hours talking about experiments. We talked about how this might what this might be. Slowly they realized what they had discovered. By tinkering with RNA instead of DNA, they could eliminate a wrong message sent by a bad DNA blueprint. It was as if the contractor never showed up for work. The faulty building never got built. Craig and doctor Fire continued to experiment and began publishing their results.

In two thousand and six, they would win the Nobel Prize for discovering the phenomenon now known as RNA interference. People hoped it could usher an as dramatic a medical revolution as the insulin discovery Craig had read about in the Washington Post eight years earlier. Their work delighted scientists could researchers finally be able to treat genetic disease, but it also fired up entrepreneurs. Was their need to be made? The race was on. A research scientist named Rachel Myers

answered the call back in Cambridge, Massachusetts. Rachel signed on as one of al nylum's first employees. Rachel has a near perfect scientific resume. She earned her PhD from m I T and completed a post doc at Harvard Medical School. She was working at another hot biotechnology company in town when she got the call to join a nylum in two thousand three. She stayed for fourteen years. Most of that time I spent working on one central problem, one

that's pretty common in the biotech industry. How do you turn breakthrough research into something patients can actually use? Very quickly, it became clear that there was one enormous challenge, and that challenge is what we call the delivery challenge. In order to make a drug that works by this mechan is and you have to make a piece of RNA

and you have to introduce it into the cells. And that sounds easy when I say it, but it turns out that's extremely difficult, and it's difficult because an RNA drug has two properties that make it very much not a good kind of medicine. And the simple properties are it's um got very high charge and it's big, very

very big. So it's probably, let's see, thirty times larger than a normal drug like an aspirin that you would take, and that makes it very difficult to think about how you deliver it, get it to the places it needs to go. At what point did you realize that that was going to be the major challenge in the very beginning, and in fact, people all over the world talked about that as the challenge with developing drugs and RNA interference

the delivery challenge. So you joined on nyleum knowing that that was going to be the major little If you miss some of that, like RNA having a high charge and being large, don't worry. You're not alone. You don't have to understand the details. But here's why it matters. What made r N a I so interesting in worms was that you can inject it anywhere and it worked. But that was worms. This was humans, and taking a

drug from worms to humans is almost impossible. In fact, as a reporter, I'm surprised to learn that's how really the science was in two thousand two when they started. If someone pitched me today with a scientific studies saying they cured disease and worms, I would honestly think they were Charlottean trying to get one over on unsuspecting reporters or investors. Worms are easy, humans are hard. Throughout this time, Rachel and her colleagues were also thinking about another challenge,

what disease should they even focus on. Drug companies must choose which diseases they attack, and maybe the most important decision they make. These decisions aren't made in a vacuum. Drugs don't work in every illness, but in this case, in theory, at least, discovery could cure perhaps an unlimited array of diseases very quickly. However, that field narrowed, so as we continue to develop the technology, we learned something

really important. The delivery challenge and the solution to the delivery problem lead us to a particular tissue, a particular part of the body, and that part of the body is the liver. And that was an enormous and important finding that the best candidates we had for making drugs worked by going to the liver. And so once I

tell you that, then you say, okay. So now if we think about diseases, we have to think in a somewhat refined way, right, and we have to think about diseases for which a drug going to the liver is important. So we started a very elaborate exercise to ask the question, if we look out across medicine, what are the important diseases with unmet needs where a drug going to the liver will have an impact on that disease? That exercise would eventually lead researchers to a disease whose name is

a mouthful. It's a type of hereditary amyloidosis. It's a disease so rare that it often appears as a mystery illness on shows like E. Rn House, where doctors aren't a race against time to figure out a diagnosis. Doctor, you have amyloidosis. Why should I believe him? Now? Television aside,

the illness is incredibly rare and incredibly tragic. My middle age patients developed something called neuropathy, a kind of tingling that begins in their toes and fingers but progressively spreads sufferers eventually can't walk, their heart deteriorates, their stomachs can't process food, and they ultimately waste away and die. The disease is genetic, meaning that it runs in families. Some people get it and some people don't, but it comes

on slowly. For some people can start in their twenties. For others it starts in middle age. If it ran in my family, there was no treatment for it. I'm not sure if I would want to know if I had it or not. Back when all Nylum started researching the disease, there was no approved drug that treated the underlying condition. But all Nyleum, with its approach of altering illness at the genetic level, stood a good chance at being able to address it. But they needed money. John

Marganorri is the CEO of all Nylum. He's the only CEO of the company has ever had. He's a scientist by training. He got a PhD from the University of Chicago and is the son of Greek immigrants. In a profile I read about him, I found out he liked to play pool and smokes the accase general cigar, which I can totally see. I can tell you John is ubiquitous around Cambridge. He's one of the first CEOs I've met here, and I don't think that's a coincidence. He

seems to pop up everywhere. Part of that is because as the CEO of al Nylum, John has seen it all Back when he joined the company, it needed money, and lots of it. When I joined, we had raised seventeen and a half million dollars. I mean, I knew when I started that we would need to take probably a decade or more before we had our first drug that would come out of the science, and I knew that it would take billions of dollars to ultimately do it.

Luckily for the company, the science was starting to get a buzz. I mean, there was a lot of early excitement around our interference. You know, it was written up in as the as the as the molecule of the Year by Science in two thousand two. You know, Forbes wrote an article about it being the next billion dollar breakthrough in biotechnology. Al Nylum started doing deals with big companies Merk, Novartis, roche To Cada. Ultimately we raised over

a billion dollars from pharmaceutical partnerships that we formed. Soon urn Ai as it became known was one of the hottest areas of biotech. Everybody wanted a piece. But then something alarming started to happen. Trials that used urn Ai started to fail. Companies began to leave the field, splashy acquisitions were written off, pharmaceutical partnerships ended. It started to seem like all Nyleum might also be headed for extinction. We had many, many near death moments as a company.

We had one in where basically the entirety of the pharmaceutical industry, who we're working with us earlier to help fund the company and help advance some of the science, they basically gave up hope and they left the field. And so there was a very strong vote of no confidence, if you will, in what we were doing as a public company. We were trading under our cash. We had more cash on our balance sheet than we had stock value as a stock. So that it's a pretty dire moment.

I can't emphasize this enough. Biotech companies fail all the time. Clinical trial results will be disappointing, investors will figure the science doesn't work, people pick up and move on. What happens much more rarely in biotechnology is what happened next. The company stuck with it, and thanks to John's fundraising through the good times, they had the cash to actually

see the science through. After sixteen years of research, On August ten of this year, on Nylum won approval for on Patro, it's first drug and the first drug ever approved to use RNA interference. John recounts the moment, Oh, that's a funny story. I was actually on a stage talking to our field force. My long standing partner and our president, Barry green Um was looking at it at his emails as he often does, and he screams out, John,

we just got approved. And sure enough, you know we did. Uh. And I was there and got a round of applause from everybody. Um, Barry came up, I gave him a big hug, and you know, off we went. So it was literally couldn't have been more. It could have been better planned. It was a watershed moment, not just for the company, but for the industry. At least a dozen biotech companies are working on therapies, which, like all Nylum,

seek to treat disease at the genetic level. If All Nylum could do it, the hope is that they can too. In many ways. The drug represents the best aspects of the industry, but it also represents its insane economics. An Alum's drug will cost four hundred and fifty thousand dollars a year four hundred and fifty thousand dollars a year before any discounts. Only three thousand patients with this disease

have ever been diagnosed. Even at that high price, was so few patients, it's unlikely that this drug will be profitable anytime soon. It is a long time between now and being profitable as a company. We can't do it on patrol alone. We obviously have other products in our pipeline to bring forward to ultimately um, you know, get to a point as a company where we could be a sustainable business. In its first three months on the market, the drug generated only a half a million in sales,

a pittance in biotech. Investors are worried. Shares declined by more than this year, but the market still sees promise. The company has a market value of more than seven billion dollars. To give you a sense, that's about the size of Dunkin Donuts or Jet Blue, companies that are profitable. Unlike all Nylum, which has generated hundreds of millions in losses. But all Nylum isn't selling coffee or cheap flights to Florida. What they do can mean the difference between life and death.

It's an awesome responsibility. But what keeps me going is the fact that we know we have an important approach for new medicines, and we have an ability to make a big difference in patients lives. And you know, every morning I wake up, I'm excited to go to work, even to this day. Here's the scary truth about drug development. It can be arbitrary. Scientific breakthroughs can send billions of pharmaceutical dollars into any given field, but one high profile

failure can just as easily make that money disappear. Some companies survive, but many don't. Firms get sold, research teams disperse, patients die. Most drugs never go anywhere. They sit on shelves. Small percentage going to clinical trials, and many of those fail. But every so often one makes it through. And that's only the beginning. And that's it for this week's prognosis. Thanks for listening. Do you have a story about healthcare in the US or around the world. We want to

hear from you. You can email me m Cortes at Bloomberg dot net or find me on Twitter at big Cortes. If you are a fan of this episode, please take a moment to rate and review us. It helps new listeners find the show. This episode was produced by Liz Smith. Our story editor was John Heckinger. Thanks also to Drew Armstrong, Francesco Levi's head of Bloomberg Podcasts. We'll see you next week.