Start-up Phage Biotech’s business model is based on bacteria-attacking bacteria (bacteriaphage). Imagine a creature, 40 times smaller than the average germ, that injects its DNA into a germ. Dozens of bacteriaphage offsprings develop inside the germ within minutes or hours, and feed from it until they completely destroy it.
This microscopic jungle is well known in biology, but its potential application has been forgotten over the years, according to Asher Wilf, founder and interim CEO of Phage Biotech.
When penicillin came into use in the early 1940s, it was considered a miracle cure and it has been used massively ever since. Furthermore, the advent of antibiotics almost wiped out basic research of infectious diseases. “Belief in antibiotics is almost religious. Doctors were educated for decades to think only of antibiotics for treating infections.”
However, antibiotics created new problems. They wiped out the more vulnerable epidemics and left the stronger ones, similar to what happened with DDT and insects. The result, for example, is that the germ population that developed immunity to antibiotics is thriving, and tens of thousands of people die from infections they contract in the hospitals.
Wilf forecasts that a bacteria-resistant crisis will peak within about three to five years. This is when the last patent on antibiotics is scheduled to expire (2006). “It’s a very painful point for giant pharmaceutical companies. They'll be obliged to deal with the matter. Both they and biotech companies have forgotten about infectious diseases.”
Phage Biotech’s solution comes from nature. The company is trying to develop an off-the-shelf product with a concentration of bacteriaphage, to serve as an alternative treatment for infections that no longer respond to antibiotics. “It’s not a technological breakthrough as far as the basic application is concerned,” Wilf says. “It’s simply a matter of the correct isolation of the phages from nature, and concentrating and applying them on the germ population.”
Phage therapy can potentially be applied in the veterinary, food industry, fermentation industry, and agricultural sectors.
Already taken hold in Russia
Phage methods of disinfecting have apparently been used in Russia and Georgia for seventy years, mainly due to the small supply of antibiotics. The West had not heard of phage therapy until the 1990s, according to Wilf, because of the Cold War and lack of contact with the East.
Phage Biotech’s strategy is to harness the expertise gained in Eastern Europe. The company this week signed a strategic cooperation agreement with Immunopreparat of Russia. The agreement will give Phage Biotech exclusive access to Russian knowhow for $100,000 during the first year, plus 10% royalties on the future product.
Phage Biotech will have to embark on the arduous regulatory track in the US and Europe, and find methods and processes it can patent as intellectual property. The regulatory problem is serious, since Soviet experience is not binding in this area and the little testing that has been done in the West has only involved animals. Wilf says, “The first thing we'll have to do is prove the principle in accepted formats. At the moment, we’re at the end of this stage and we'll follow it up by starting with animal tests.”
Out of the five or six most common infections in the West, one was chosen to demonstrate the concept - Pseudomonas aeruginosa - a virus responsible for many infections, of the skin, ears, eyes, and so on.
Since these infections are external and do not require internal treatment, the choice is expected to shorten the regulatory process. The company is already starting to gather specimens from patients in hospitals in Israel. At the same time, Wilf admits that the Pseudomonas aeruginosa market is not particularly large, and similar US start-ups are making other choices. Phage Biotech wants to create a technology platform for the treatment of several types of infections.
“Globes”: Why aren’t you going straight ahead with commercial applications?
Wilf: “Pseudomonas aeruginosa is the first milestone. The treatment will need to penetrate. We won’t focus on developing preparations, because the cost-efficiency ratio isn't very good. The goal is to receive valuation approval based on existing know-how. We’re the only ones with this knowhow, following our contractual agreement with the Russians. Israel also has a relative advantage from the standpoint of location, human resources, and the transfer of technology from Eastern Europe.”
What will your product be like?
”It might be a tablet, enema, or cream, but the preparation won’t entail only development. It will require selections and updating based on the germ population, similar to flu vaccines that change from year to year. The application will have to be service-intensive. It’s not a one-time antibiotics course.”
After the company draws up a business plan and reviews the results of the clinical trials on animals at the end of the summer this year, it will hold another financing round. Wilf calculates that Phage Biotech will need just over $2 million up to the first stage of the clinical trials. The company is currently seeking the assistance of the Ministry of Industry and Trade Chief Scientist’s Office to finance research in specific projects.
Will you also approach the funds?
”Yes, but I want to do it when we’re ready. Timing will be everything. There are another six young companies worldwide in the same field, mainly in the US and Canada. The main competitor, Exponential Biotherapies, is about to begin clinical trials. This isn't necessarily bad news for the others, because it's likely to be a regulatory trailblazer.”
Who’s leading whom?
“We do the work for one another.”
| Business Card
Name: Phage Biotech
Founded: March 2001
Product: Development of lytic bacteriophage technology Customers: None Competition: Exponential Biotherapies Investors: US investment company (25%) and founders. web site: www.phage-biotech.com |
Published by Israel's Business Arena on 2 July, 2001