NEW YORK (Dow Jones) -- Ten years from now, if doctors are successfully treating cancer patients with stem cells, 2007 may be considered a pivotal year in the drug-discovery process.
On Monday, a joint press release from GlaxoSmithKline PLC (NYSE:GSK) (GSK) and startup OncoMed Pharmaceuticals touting a development deal largely went unnoticed. But as VentureWire pointed out, the agreement represents the largest bet on a cancer stem-cell startup by a large pharmaceutical company. A step further, it capped a year that has seen Big Pharma finally beginning to endorse stem-cell research, no longer leaving it to private investors and academic laboratories.
GlaxoSmithKline (NYSE:GSK) is investing several million dollars and handing over some extra cash to OncoMed, while placing on the table up to $1.4 billion in potential milestone payments if the startup can find a way to develop and commercialize a promising treatment method that targets cancerous stem cells to treat solid tumors. There will also be royalty payments on any collaborative product sales. That's ample motivation for a 3-year-old startup that has so far raised more than $50 million from venture-capital firms.
Without getting too technical, OncoMed's technology focuses on the small amount of adult cancer stem cells -- not the controversial embryonic stem cells generating headlines -- that are believed to compose less than 2% to 3% of the cells in a solid tumor. But research suggests these are the cells that enable breast, brain and other cancers to recur and spread even after they've met chemotherapy.
The discovery several years ago of these bad actors and their role in tumors was considered a major breakthrough in cancer research. Latterell Venture Partners found the research compelling, and realized that if researchers could figure out a suitable way to extinguish these cancer stem cells without harming normal stem cells, they could defeat cancers -- and make a fortune. So Redwood City, Calif.-based OncoMed was formed in 2004 based on technology developed in the labs of the University of Michigan.
OncoMed brought in prominent venture firms Morgenthaler Ventures, U.S. Venture Partners and Vertical Group, and later added other big names like Adams Street Partners, Bay Partners and DeNovo Ventures.
Other startups are now in the game, too, developing different methods for treating cancer and other health problems using stem cells. Two weeks ago, Seattle-based Fate Therapeutics raised a $12 million Series A round from Arch Venture Partners, OVP Venture Partners, Polaris Venture Partners and Venrock to develop small molecule drugs by "reprogramming" adult stem cells into acting in an embryonic-like state. This innovative technique avoids using actual human embryos, a technique fraught with political and ethical issues.
