Even by the standards of the biotech industry, Regeneron Pharmaceuticals Inc. is on a particularly daunting quest. It is one of a handful of companies focusing on the body's most complex mechanism, the brain. And it is pursuing treatments for deadly diseases without assurance that ways will be found to escort these drugs through the blood-brain barrier that protects the organ. It might hardly seem worth the effort but for the chance to find miracle cures and someday capture markets worth billions. And except for this: Dr. Leonard S. Schleifer, a neurologist and Regeneron's 40-year-old founder, has a plan to last the long haul.
Schleifer's strategy is to overwhelm the competition with scientific talent, including the three Nobel laureates on Regeneron's 14-member advisory board that helps set research priorities. By the mid-1990s, he plans to have produced drugs based on nerve growth factors--or natural proteins--that treat the least complicated neurological diseases. After the year 2000, his goals are much bigger: nerve growth drugs for scourges such as Alzheimer's and Parkinson's disease. For the funding all this will require, Schleifer is counting on his 150 scientists to make unforeseen breakthroughs and on income from research contracts.
POWERFUL PARTNER. It's a plan fraught with scientific and market challenges. In May, four years after its founding, Regeneron received Food & Drug Administration permission to do human trials of a nerve growth factor called ciliary neurotrophic factor, or CNTF, to treat amyotrophic lateral sclerosis (ALS). Known as Lou Gehrig's disease, this is a debilitating, ultimately fatal, motor-neuron ailment that afflicts 30,000 people in the U.S. Stuart Weisbrod, a biotech analyst at Merrill Lynch & Co., says CNTF's domestic market could be $450 million.
This may be a hard prize to win, however. A joint venture of Synergen Inc. in Boulder, Colo., and Syntex Corp. in Palo Alto, Calif., is in close pursuit with its own human trials of CNTF, and it holds a key patent on the drug. The FDA has already given CNTF orphan-drug status, a monopoly granted as an incentive to develop medicines for rare diseases. That means the first company to win FDA approval will have an exclusive right for seven years to sell CNTF for treating ALS. Weisbrod calls the drug "the most competitive of the newer biotech products."
Beyond that lies a major scientific hurdle. Regeneron's first drugs, including CNTF, work on the peripheral nervous system and thus can be injected under the skin. "We can deliver on our business plan for five years and beyond without a technology that breaches the blood-brain barrier," says Schleifer. But after that, the equation will change. Nerve growth factors are large proteins that currently can't reach the brain except through a shunt--or tube--inserted into a patient's head. Experts say it may take a Nobel-prize breakthough to come up with a more practical delivery system. And it isn't clear when that will be. Biotech startups such as Alza, Alkermes, and Pharmatec are working on a variety of approaches, which may not be ready for 5 to 10 years.
Nerve growth factors are the product of a decade of research on the molecular workings of the brain. Existing therapies relieve brain-illness symptoms but don't treat the causes. Levo-dopa, a longtime treatment for Parkinson's, helps sufferers by "simply replacing missing chemicals," says Ronald M. Lindsay, vice-president for neurobiology at Regeneron. And its effectiveness declines as the disease progresses. By contrast, Regeneron is targeting the underlying cause of the disease, which is that nerve cells, or neurons, degenerate and die instead of replenishing themselves as other cells do.
STUMBLING BLOCK. That's where neurotrophic factors come in. In a healthy brain, these proteins constantly promote nerve-cell survival. They also do very specific jobs. CNTF affects only motor neurons, making it good for Lou Gehrig's disease. Another product Regeneron is readying for the mid-1990s, called brain-derived neurotrophic factor, or BDNF, appears to work on the neurons that die in Alzheimer's and Parkinson's, ailments that afflict 6 million people in the U.S. Until the blood-brain barrier can be breached, Regeneron is aiming BDNF at nerve damage caused by AIDS and diabetes, among other diseases. Industry leader Amgen Inc., based in Thousand Oaks, Calif., is contributing $53 million and the work of 30 scientists to help perfect this and another drug.
Regeneron attracts such partners because of its research team. It claims one of the largest combined groups of molecular biologists and neurobiologists in the world, many drawn by a degree of freedom that's rare at drugmakers. Three years ago, George D. Yancopoulos, then 29, graduated from Columbia University with an M.D. and a PhD in molecular immunology--and one of the school's highest grade averages in 40 years. Courted by such top research universities as Stanford, Columbia, and UCLA, Yancopoulos instead hired on as vice-president for discovery at Regeneron in Tarrytown, N.Y.
The company not only promised generous funds for his research, it agreed to let him publish his findings, a combination that he says makes it "a nirvana of science." This approach may give competitors a lift, but Schleifer is wedded to it anyway. Otherwise, "you cannot attract first-rate scientists," he says. "This is the reward system for them."
CRITICAL MASS. Although its emphasis is still research, Regeneron is revving up for production. Two mf its advisory board members helped Merck & Co. commercialize Mevacor, the cholesterol-lowering drug. And Regeneron has a new $4 million factory. It makes CNTF by inserting a gene for the nerve-healing protein into bacteria, which manufacture the drug. Regeneron is using varying dosages of CNTF in its trials on ALS patients, while Synergen and Syntex, in a less sweeping approach, use a single dosage. Analysts are betting on Regeneron to get through the FDA first: "It has such a critical mass of scientists that it looks likely to win," enthuses Larry Bloom, an analyst at Dillon, Read & Co. in New York. It has already petitioned the Patent & Trademark Office to overturn Synergen's patent--on grounds that Regeneron first cloned the gene for CNTF. Synergen says simply that it has the patent and won't comment on its clinical trials.
Even if Regeneron loses this battle, Schleifer says, revenue from research agreements and other products will keep it solvent. Reflecting the malaise in biotech stocks, the company's shares have dropped 50% in the 15 months since it went public at 22 and raised $99 million in the second-largest biotech public offering. But it has $100 million in cash. And its losses so far aren't overwhelming--$4.4 million last year on revenue of $12.5 million, which came from interest income and research deals with the likes of Amgen and Sumitomo Corp. It's also developing more nerve growth factors with collaborators such as Karolinska Institutet in Sweden and the Max-Planck-Institut in Germany. At the least, this work should lead to new understanding of the brain. At most, it may one day yield life-saving drugs.