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These Venture Capitalists Bet on a Miracle Fat Pill and Lost

  • Harvard-discovered weight-loss hormone disputed by scientists
  • Venture capitalist firm Third Rock pulls plug on biotech

Imagine a pill that mimics the effects of vigorous exercise on the body.

Three years ago, Bruce Spiegelman, a prominent Harvard scientist, said he had discovered an “exercise hormone” that promised to unlock a new way to treat obesity and diabetes.

It didn’t take long before a leading biotech VC firm, Third Rock Ventures, made a big bet on the hormone. Feverish press coverage followed, hailing a potential new miracle drug. So why did Third Rock quietly pull the plug on the project earlier this year?

The story of Spiegelman’s stalled exercise hormone, which he named irisin after the Greek goddess Iris, is a cautionary tale at a time of unbridled enthusiasm in the biotechnology sector. Innovations in cancer, hepatitis C, and advances in gene therapy have investors pouring money into drugmakers. Even with the recent market selloff, the Nasdaq Biotechnology Index has gained 28 percent in the past year, compared with a 2.3 percent drop in the S&P 500 Index. Yet a majority of biotech venture capital deals, like this one, fail.

Good Fat

“It’s rare to have investors want to talk about what didn’t work,” said Bruce Booth, a partner at Atlas Ventures.

Some 55 percent of biotech venture capital deals don’t earn back the initial investment, said Booth, who sees that failure rate as the price of pushing the boundaries in search of successful innovations. And as long as the other 45 percent of deals have healthy returns, VCs can still come out ahead, he said.

Almost from the start, the hype around irisin was high. The excitement began when Harvard’s Spiegelman published a paper in the preeminent science journal Nature in 2012, saying he had discovered a hormone that played a role in the conversion of “bad” white fat into calorie-burning brown fat. White fat is the stuff of beer bellies and jiggly arms, and brown fat, found in hibernating bears and newborn babies, is thought to be “good” fat.

Researchers have hypothesized that understanding how brown fat is stimulated would unlock therapeutic pathways to help obese individuals or diabetics lose weight.

Media Frenzy

In his Nature article, Spiegelman wrote that exercise spurs the production of a protein called Fndc5, which then breaks apart. One of the pieces, a chemical messenger secreted into the blood, activated the conversion of white fat into brown fat. Spiegelman called it irisin, after the Greek messenger goddess Iris. Mice given Fndc5 lost weight and had improved blood sugar levels.

Mainstream media publications took note. “Remarkable new insights into how exercise affects the body,” wrote the New York Times. “Lucky Mice: Researchers have Found a Protein that Mimics the Effects of Exercise,” proclaimed Time magazine. Bloomberg News weighed in as well with a story headlined “Exercise-Related Hormone May Help Obesity.”

Boston-based Third Rock Ventures, which specializes in creating early-stage companies in cutting-edge areas of science and health care, jumped in. Third Rock, which has $1.3 billion under management, set up Ember Therapeutics in December 2011, committing $34 million, and bought the rights for irisin and other molecules.

Spiegelman came on as scientific founder, and Chief Executive Officer Lou Tartaglia said Ember hoped to test a version of irisin in humans as soon as two years from the company’s launch. Third Rock’s investment was not unusual in size; in the same year, it launched Sage Therapeutics Inc., a biotech tackling rare central nervous system disorders, with $35 million in funding and led the $40 million fundraising to create cancer drugmaker Blueprint Medicines Corp.

Third Rock Backs Out

Both Sage and Blueprint Medicines have successfully gone public -- Sage’s shares have more than tripled since its July 2014 IPO, and Blueprint’s shares have gained 62 percent since going public.

Yet Ember wasn’t moving forward at the same pace. Third Rock, which has declined to say how much of its initial investment was spent prior to closing Ember, announced in March that it had sold some of Ember’s intellectual property to closely held Mariel Therapeutics Inc. Mariel wasn’t interested in the rights for irisin, which have been returned to Harvard.

Ember ceased lab operations. “It would take a longer time horizon than anticipated to sort through the complex biology and pathways of brown fat,” explained Third Rock partner Kevin Starr.

That same month, Duke professor Harold Erickson wrote an article criticizing Spiegelman’s and other academics’ irisin research. The testing kits used to measure irisin in more than 100 studies were flawed, he said in the article, which was published in the journal Scientific Reports. Comparing two tests, a commonly used one called an Elisa and another called a Western Blot, Erickson and a team of researchers found that when the Elisa said it had found irisin, the Western Blot said those proteins were too big to be irisin.

‘No Credible Evidence’

To Erickson, this meant that any study that has used an Elisa is suspect. He said he is alarmed at the number of papers that have been published on irisin which used Elisas -- more than 170 papers, according to a press release by Duke University.

“Many research labs around the world are spending serious money on these studies, and we wanted to get their attention,” said Erickson in an interview. He concluded that there is “no credible evidence that irisin exists in the blood of any animal."

Riled by Erickson’s assertion that irisin was a "myth," Spiegelman went back to the lab to gather more data and has shot back with a new paper, published Aug. 13 in the journal Cell Metabolism, measuring irisin in human blood with a method known as mass spectrometry. Erickson now concedes that irisin may exist, but said in a phone interview that Spiegelman has yet to prove irisin can actually induce white fat to behave like brown fat.

The sparring between Spiegelman and Erickson shows how challenging biology can be and how long it can take to nail down mechanisms in the body. It takes more than 10 years, on average, to research and develop a new drug, according to industry group Pharmaceutical Research and Manufacturers of America.

And, in the case of irisin, Third Rock wasn’t willing to wait any longer for human trials to begin. That’s been a rude awakening for Spiegelman.

“You get two to three years,” he said. “And if it’s not looking like it’s just about to go into the clinic, you’re toast.”

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