Bristling With Promise

Startup Curis is developing a class of drugs that could halt hair loss -- and treat cancer

If you're fighting a receding hair line, the options are probably all too familiar. There are comb-overs, hair potions, and more drastic transplants. Then there's Propecia, which may actually work -- if you can get past the warnings about sexual dysfunction. But with such treatments, the result may be little more than peach fuzz, and the hairs fall out when you stop using the drugs, says David H. McDaniel, director of the Institute for Anti-Aging Research in Virginia Beach, Va.

It's no wonder combined U.S. sales of the leading branded hair-growth tonics and drugs amount to less than $1 billion a year, despite the fact that about 40 million men in the U.S. alone are losing their hair. "People thought they'd go from Kojak to Chia Pet," says McDaniel. "But the results have been underwhelming."

A tiny biotech company named Curis Inc. (CRIS ) believes it has a promising alternative. It's an experimental drug based on a cellular mechanism with a bristly moniker: the Hedgehog signaling pathway. Named after the furry-looking mutant fruit flies in which it was first discovered, the pathway is a complex network of proteins that cells use to communicate. Scientists have discovered that these specific cellular signals can also serve as a molecular switch. Flip it in one direction, and you can wake up sleeping hair follicles. Tweak it in another way, and you might conceivably halt tumor growth in certain types of cancers, temper neuron destruction in the brain, and alter a variety of other disease progressions.

So far, the results have only been observed in animal experiments -- and everyone agrees that lab critters rarely respond exactly like humans. Still, the data are so promising that some of the world's top biotech and pharma companies have cut deals with Curis. In April, Genentech Inc. (DNA ), which has licensing agreements with Curis, said it hopes to start human trials of a skin-cancer drug this year. Curis is also working with Wyeth Pharmaceuticals (WYE ) on a stroke treatment.


These two partners alone could shell out more than $300 million in licensing payments over the next five or six years, providing a much-needed infusion for Curis, which has been unprofitable ever since it was born out of the merger of three cash-starved biotechs in 2000. And CEO Daniel R. Passeri says that by the end of this year he expects to sign up a partner to help with human clinical trials for a Hedgehog-related treatment for baldness.

Like the mammal, the Hedgehog signaling pathway is especially frisky when it's young. In embryos, this biochemical chain reaction operates at full force, controlling the formation of certain organs. In adults, Hedgehog is less active, but it kicks back into high gear periodically to help the body recover from injuries. That power intrigues Lee L. Rubin, Curis' chief scientific officer. "The idea is that maybe in adults you can reactivate the pathway to regenerate tissues," he explains.

Hedgehog is one of many cell-signaling pathways that scientists are scrutinizing. And Curis hopes it will work wonders on thinning pates of both males and females. When you see a lustrous head of hair, chances are it's at least partly due to healthy Hedgehog signaling, which prompts the body's multitalented stem cells to proliferate around follicles, initiating hair growth. By activating Hedgehog, Curis' drug targets hair growth at its root, so to speak. That could make the drug more effective than current treatments, which mainly aim to increase the size of shrunken hair follicles or to fight certain hormones involved in hair loss.

Curis' decision to farm out some of its hair-loss research costs -- and hence share the potential payoff -- was painful. The company had planned to retain 100% rights to the baldness market, hoping to pour proceeds from any gold rush back into research on life-saving drugs. But after several companies' painkillers got pulled from the market because of safety concerns, Passeri came to a sobering realization. "Any quality-of-life drug is going to be looked at very carefully" by the U.S. Food & Drug Administration, he says. "The FDA is likely to require big safety studies -- broader than we can subsidize ourselves." Having lost $13.9 million on just $5 million in sales in 2004, Curis now sees partnerships as its most viable route.


Sharing the baldness market will help Curis conserve the cash it needs to foster its other promising drugs. Its scientists are especially optimistic about their partnership with Genentech to develop a topical treatment for basal cell carcinoma. About 1 million new cases of this form of skin cancer are diagnosed yearly, making it the most common human cancer. Surgery is effective, but it can leave unsightly scars. When a topical drug co-developed by Curis and Genentech was applied directly to samples of cancerous animal skin, the tumors disappeared and the surrounding healthy skin remained intact.

The key to the cancer treatment is not to turn the Hedgehog signaling pathway on, as Curis is doing for hair loss, but rather to turn it off. In basal cell carcinoma, the pathway goes haywire, upsetting a whole menagerie of quaintly named proteins. Normally, the Hedgehog gene makes a protein that binds to another protein called Patched, found on the outer surface of cells. Patched is supposed to repress a cancer-causing protein called Smoothened. But in basal cell carci- noma, Patched malfunctions, Smoothened runs wild, and tumors form and grow.

Curis scientists figured out how to block the abnormal Hedgehog signal with a substance that has the same effect as a chemical originally discovered in the 1950s by Idaho sheepherders. When their sheep ate corn lilies containing the chemical, their lambs were born with just one eye. Scientists later discovered that the substance, which they dubbed cyclopamine, was causing defects by interrupting the Hedgehog signal. Now they believe they can harness the chemical's disruptive power and direct it straight at tumors, potentially yielding entirely new ways of treating many different cancers. "Over the last two years, Hedgehog has been implicated in pancreatic, prostate, and some forms of lung cancer," says Fred de Sauvage, senior director of molecular biology at Genentech, which plans to work with Curis to find other potential uses of Hedgehog inhibitors.

Hedgehog's multifaceted role in the body might also be its undoing. Because the pathway seems useful in some diseases when it's shut off and in others when it's turned on, forcing it in one direction might bring on dangerous side effects.

Wyeth is looking into that prospect as it works with Curis on a drug designed to activate the Hedgehog pathway in the brain after stroke. The researchers believe that Hedgehog will decrease damage, and they hope it will mobilize stem cells to make new neurons. But when they look at the growing body of research that shows Hedgehog playing a role in some cancers, they wonder about turning the pathway on after stroke. "We have to make sure we're not causing tumors," says Menelas N. Pangalos, vice-president of neuroscience discovery at Wyeth. Curis' Rubin says he believes the risk will be tempered by the fact that the stroke drug would only be given to patients once. But no one will know for certain if any of Curis' therapies are safe until they are tested in humans.

That uncertainty may explain why investors are keeping their distance. Curis' stock has dropped from $5 a share in January to $3.40. That frustrates Passeri. And he's sometimes embarrassed by the notion that baldness could be Curis' ticket to the biotech big leagues. "Scientifically, it's not what we're most excited by," says Passeri -- who himself is blessed with naturally thick hair. "But from a business standpoint, it has huge potential." If all the bald pates in the world help Curis fund cancer research, the potential beneficiaries will surely outnumber all the sheep, fruit flies, mice, and humans that have contributed to the Hedgehog discovery.

By Arlene Weintraub in New York

Before it's here, it's on the Bloomberg Terminal.