Though it’s not what one might expect from its name, Lead Therapeutics wants to be a “fast follower.”

 

The fledgling San Bruno, California-based company is focused on cutting risk out of the development of new drugs by focusing on creating molecules that hit already validated targets and improve on already approved drugs or ones that are working their way through the clinic.

 

“The reason for choosing established targets is to make the fast follower approach very effective,” said Lead CEO Peter Myers, who cites Pfizer’s statin Lipitor, which became a bestseller even though it was the sixth drug in its class to reach the market. “It’s very rare that the first drug becomes the drug of choice in terms of commercial return.”

Lead plans to use the expertise of its six-person management team in the United States to design molecules that hit known drug targets, but that have more desirable characteristics than approved drugs or drugs in development. The company hopes to capitalize on the cost advantages of using chemists in China to synthesize the molecules designed here. The strategy allows Lead to stretch its dollars so it can advance a portfolio of several pre-clinical candidates at once, rather than banking its business on just one or two molecules.

 

“The whole point is to make discovery fundable in today’s financing environment,” said Sofie Qiao, president and COO of Lead, adding the company would have to have raised $60 million to fund the slate of programs it is pursuing today if it were it not to use chemists in China. “That’s something that the current venture capital community cannot stomach for a discovery stage company.”

 

As such, Lead is at the center of several converging trends within the pharmaceutical industry. The company’s strategy is, in part, a reaction to the difficulty discovery-stage companies have raising venture funding. It is also hoping to benefit from the growing appetite among big Pharma companies for early-stage compounds, as the pond of promising later-stage clinical candidates has been largely fished out. And, it is taking advantage of the growing experience of Chinese chemists, who have been working with pharmaceutical companies and acquiring development expertise and are now moving into work in the discovery stage.

Nathan Collins, executive director of drug discovery for SRI International, said Lead is taking a slightly different spin on what people have done in China to date. “They are trying to take the process of innovation, the discovery of new drugs and therapies, and trying to do that in China, rather than rely on China for more support and service work,” he said. “It’s a natural progression. It’s going to happen sooner or later. The cost advantage is very compelling.”

 

Lead has estimated that the work performed in China will be between one quarter and one third of what it would cost the company if it had done the work in the United States. The company’s plan is to advance drug candidates up until they are ready to enter the clinic and then it will partner or license them.

Three Programs

The company, which won $17 million in venture backing in November, now has three pre-clinical programs it is advancing. It doesn’t disclose specifics about the compounds. But it said it’s focusing on anti-infectives and oncology because that’s where its management team’s expertise lies. The company also believes it is in those areas where there will likely never be a single cure, and always the opportunity to add another drug.

 

Art Pappas, managing partner of Pappas Ventures, which co-led the series A round for Lead, said he’s been impressed with the speed at which the company has been able to move. The company said in six months it’s been able to select a target for an antibacterial product, defined the profile for the molecule it wanted to make, synthesized it in China, and successfully produced active molecules. Pappas credits that to the depth of the management team’s expertise in chemistry. 

 

Lead’s Myers oversaw the initial discovery of what eventually became the cancer drug Nexavar as vice president of Research and Development for Onyx Pharmaceuticals and served as vice president of research chemistry at Glaxo. Chief Scientific Officer Leonard Post worked with Myers at Onyx as a senior vice president and oversaw the development of Nexavar. And Daniel Chu, vice president of chemistry, spent more than 20 years at Abbott Laboratories, where he served as director of antibacterial research.

 

“Everybody is trying for to pursue fast follower strategies,” said Pappas. “At the end of the day it’s the skill of the chemist around known targets that will make the opportunities they pursue feasible and ultimately unique.”