Neurodegenerative and other central nervous system disorders are some of the hardest to develop treatments for due to our limited understanding of the brain. But Cerevance developed a new technology capable of profiling neuronal and glial cell populations at depths not previously possible, which is allowing the clinical-stage pharmaceutical company to identify potential drug targets in specific cell types critical to circuits disrupted by disease. By selectively targeting those cell types, the company hopes to develop more effective and safer therapeutics for CNS diseases. PM360 spoke with CEO Brad Margus about the company’s journey and its potential impact on the future of drug development.

Brad Margus, CEO, Cerevance

PM360: Why start this company?

Brad Margus: I previously started Envoy Therapeutics with my co-founder, Nathaniel Heintz, PhD, from Rockefeller University, which was based on technology for engineering genetically modified mice that allowed you to probe and trap RNAs from specific cell populations in the mouse brain and identify targets that were selectively expressed in certain cell types. In less than three years, we sold it to Takeda. We were then eager to develop something similar, but instead look at mature postmortem human brain tissue. Nat developed this new technology called NETSseq and we started Cerevance. In three years, we’ve worked with 14 brain bank partners around the world and we’ve acquired more than 8,000 human brain tissue samples from both healthy people and donors who had diseases such as Alzheimer’s and Parkinson’s.

What was the process like for getting investors?

Besides talking to venture capital firms, I also spoke with Takeda because they knew me from buying my last company. They were in the process of shutting down a research facility in the U.K. with about 150 people, so I worked out a deal where not only did they invest but I also got about 25 of their people and some turnkey lab space and equipment that allowed us to hit the ground running really fast. We explored a build-to-buy model, in which a company invests with a much higher valuation but then has the right to buy you for some price in the future. We ended up not doing that, so Takeda was just an investor in both our Series A in late 2016 and Series B financing, which we completed in April. Some of our other investors include Lifestone Ventures, Dementia Discovery Fund, Google Ventures, Bill Gates himself, and Foresite Capital.

From my understanding about NETSseq, it especially allows you to measure the expression of lower expressed genes. Can you explain how this technology works and why this would be a significant development?

For a long time, researchers have been interested in why gene expression is different in different cell types in the brain, or even the same cell type in different areas of the brain. For example, in Parkinson’s disease, some cells that produce dopamine die and when you’re diagnosed you’ve already lost 70% of them. It would benefit us to know why those cell populations are the most vulnerable and if there are pathways you could intervene in to correct that process.

We have mostly relied on mice to figure that out; however, mice are not a good model for late-onset human neurodegenerative diseases. For humans, you could take stem cells and try to turn them into a certain type of neuron, but then it’s still embryonic. The other common approach is Single Cell Analysis or Single Nucleus Analysis where you pluck off one cell at a time and just pull the RNA out of that one cell. But then you only get the most highly expressed gene in that cell, so you can’t measure lower expressed genes.

To actually identify potential targets, you need to look at all the genes expressed by that cell population—usually about 10,000 or 12,000 genes in any cell type. That’s why we developed NETSseq, because you’re able to sort certain cell populations and do RNA sequencing on those pooled populations to get these deep data. When you do this for a lot of cell types, you can start to find genes—sometimes druggable ones—that are selectively expressed only in the cell type you care about.

Cerevance scientists working in the lab.

How far along are you in the drug development process to actually release treatments?

We identified a novel protein that is expressed only in one cell type found in the dopamine D2 receptor-dependent indirect pathway in the striatum as a potential target for Parkinson’s disease, and are currently in Phase II trials. We hope to have those results by January, and that they show it will work as well as L-DOPA—the standard of care for Parkinson’s patients—but won’t cause the side effect of unwanted movement. We also think our drug will reduce off-time in Parkinson’s, which are periods each day when a patient’s drug isn’t working.

Additionally, we have several targets still in pre-clinical phases for other neurodegenerative diseases. For example, we identified a target that’s selectively expressed only in the microglia—the immune cells of the brain. What’s exciting about that target is blocking it dampens the inflammatory process in the brain, but very selectively. You can’t make an anti-inflammatory for the brain that affects everything because you need an inflammatory response, especially if you’re going to give the drug chronically to Alzheimer’s patients over time.

Alzheimer’s research is an area where companies will get close with Phase III and then the drugs fail. What are you doing differently that will lead to better results?

We are picking selectively expressed targets that will have less likelihood of side effects, which we believe will lead to a much lower failure rate. Furthermore, the industry’s been obsessed with the same old targets and the same hypotheses about how you get Alzheimer’s. Global pharmaceutical companies are a little nervous about going off onto a completely new target until it’s proven, but our mission is to focus on new approaches.

Late last year, you partnered with Takeda on a new research initiative. Can you share more about that and other potential partnerships?

In December, we signed a collaboration agreement with Takeda in which we’re looking at healthy people’s gene expression in two cell types that Takeda feels play a role in mediating certain GI disorders. They want to identify drug targets that are expressed highly selectively only in those cell types and nowhere else. With where we are now, we are starting to talk to several other global pharmaceutical companies about partnering on disease areas that maybe we wouldn’t pursue ourselves. We can’t do everything ourselves that everything in our platform could do.

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