Bio ventures promoting cosmetic products while claiming to carry the banner for developing new drugs are no longer new to the public. Not just ventures but some of the nation’s medium- and large-sized pharmaceutical companies may be reeling from severe revenue drops had it not been for makeup, health food, and beverage products.
Given the nature of new drug development that requires massive investment over an extended period, such a trend could be seen as a desperate step to secure funds for research and development. There are also negative views, however, criticizing these companies are sticking to easy and safe business to avoid risk.
One particular bio venture has vowed that no matter how hard the going gets, it will never resort to selling makeup. Considering the current state of Korea’s pharmaceutical industry, this is more than an admirable goal: it’s hazardous. ViroCure바이로큐어, which was developed out of Dankook University’s anticancer virus research group last June 2016, is a startup that develops anticancer virus treatments with nine employees. They have yet to sell any products, and its fastest approaching project will be phase 1 clinical trials next year.
Nevertheless, it is drawing considerable attention from professionals and investors and has received investments from venture capitals. After receiving its initial seed investments last July, merely a month after its establishment, ViroCure went on to receive Series-A investments — institutional investment meant specifically for startups — in October and December.
ViroCure uses natural virus strains to find out new medical benefits, such as anticancer treatments, with the goal of developing innovative new drugs and vaccines. Its primary pipeline project involves gastric cancer research using reoviruses found in children’s feces. The company has finished animal testing while expecting to enter the phase 1 clinical trials at ASAN Medical Center next year.
Will the company be able to commercialize its products so quickly that it won’t have to resort to selling cosmetics? Is it promising enough to continue to receive venture capital investments that are so nitpicky with startups? Korea Biomedical Review sat down with CEO Kim Man-Bok김만복 to have some talks about the company.
Kim received his doctorate in cancer biology from Canada’s University of Calgary and has worked as a research professor at Yonsei University and Jeil Pharmaceutical. He is currently serving as an assistant professor at Dankook University Medical College and ViroCure’s CEO. Kim credits his success thus far to “good luck,” but when it comes to ViroCure’s vision, he revealed confidence saying he has detailed analyses and specific plans.
|CEO Kim Man-bok asserts he would stay focused on his goal of developing innovative medicines without resorting to makeup business, in a recent interview with Korea Biomedical Review.|
Question: How did you become interested in virus research?
Answer: Many virus strains in nature are not harmful to humans. Many of them have names that are very unfamiliar to us because they don’t raise issues by causing diseases. We discover and study such strains. It is the electromotive force of anticancer virus that when an anticancer virus attacks cells, NK cells, T cells and other immune cells become active within the body.
ViroCure and Sillajen are the two companies in South Korea that specialize in studying anticancer viruses as treatments. T-VEC (product name: Imlygic) from multinational pharmaceutical company Amgen, which was approved by the FDA in 2015, is one of the products on the market.
Anticancer viruses have a relatively short history. Most companies at the early stages of development and many experts know little about them. As tens of companies worldwide are actively working with them, however, I believe many products will be released soon.
Q: What is your main pipeline, reovirus?
A: It is a virus in children’s feces. Preliminary research for its efficacy began at the University of Calgary, which patented it after continuous research. Currently, it has completed animal testing and is preparing for phase 1 clinical test. Reovirus is the most advanced of the company’s pipeline. We have done much of basic researches.
After we develop it as a stomach cancer treatment, we are considering expanding its adaptability to the liver and other types of cancer. We targeted stomach cancer first because many patients have it, particularly in Asia, along with high fatality rates. It is treatable but also prone to relapse. Additionally, there are myxoma viruses derived from rabbits and oncolytic squirrel poxvirus-derived from squirrels. Myxoma viruses cause disease in rabbits, but not in humans. In our animal tests, we transplanted cancer cells to mice to verify the possibilities, and we are the only company in the nation to test treatments with myxoma viruses. Testing with enclitic squirrel poxyvirus doesn’t exist anywhere else in the world.
Q: What is the plan for commercializing reovirus?
A: We plan to start the phase 1 next July at Seoul Asan Hospital. We are holding monthly meetings with the medical personnel at Asan, and they are showing a lot of interest in the research. We will conduct phase trials 1 in Korea but expand phase 2 to patients in China, Japan, Taiwan and other countries in Asia. We will likely release a new stomach cancer therapy in 2023 or 2024 taking the period for phase 3 into account. If the fast-track becomes possible, that time may be shortened. After its release, we’re keeping options open for various purposes, including the virus-virus joint use or combining it with other new cancer treatments.
Q: Are you also considering out-licensing, too?
A: Licensing pushes up prices, so we are considering omitting it. The goal of our company is to create an effective new medication inexpensively. Once we develop several virus treatments, we may license out some but in a limited way.
Q: What are your ways of advancing to foreign markets?
A: We are establishing branches in other countries. We need branches to create networks and use as outposts. We can reduce the period for related procedures through receiving foreign licenses for research. We can also meet and attract VC investors through these branches. We plan to hire local research and development (R&D) personnel, as multinational pharmaceutical companies operate research laboratories in each primary market. So we are establishing foreign branches and labs. Our requests to move into Moffitt Cancer Center in the United States and Rehoboth Business Center in Yancheng, China, have been granted.
Q: You don’t have any product sales. How do you plan to raise necessary funds?
A: We plan to release it initially as a pet medication. Animal medicines have short clinical trial periods and win permits more easily. You must submit a clinical trial report to the National Veterinary Research and Quarantine Service under the wing of the Ministry of Food, Agriculture, Forestry and Fisheries (MIFAFF). Our goal is to release the product by 2020.
Cancer progresses the same way in animals as in humans, so cancer in pets can use the same medications. However, insurance and other issues make medications expensive, so they’re not widely used. If we make treatments inexpensive, the pet cancer treatment market can become much bigger. We plan to make the price about one-hundredth of the current price, to hundreds of dollars.
Even if we need sales revenue, we don’t plan on selling cosmetics and the like. Makeup is not a new medicine. I believe our professionalism tumbles down if we start other researches in the midst of doing virus research. We will study only developing new drugs, and through viruses in particular. Though other bio businesses sell cosmetics to create funds for developing new medicines, those are not their original goals. It’s difficult to create as big of a ripple effect with cosmetics as with new drugs. We will become the leading group only by focusing on new medicines. We don’t have time to develop and sell makeup.
Some large corporations are even developing biosimilars instead of new medicine. But I want to make clear that biosimilars are not new biologics. Only new drugs can become the nation’s new growth engine, and ventures can do this better than larger businesses. If a company succeeds in developing innovative new drugs, it can become a global company in 10 years. We want to move in that direction.
Q: How are you preparing to win permission for and manufacture your animal medicines?
A: Last year we were chosen as a company that can move into the Osong Medical Innovation Foundation. We were given about 5,610 square meters of land where we plan to build a research wing and a good manufacturing practice (GMP) wing to create the product. We will begin preparing clinical trials for a pet medicine license after the product comes out.
Q: You’ve secured initial funds quickly. Did your patent help?
A: That’s correct. We have about five or six patents for our company’s three primary virus pipelines. Venture capital investments came in immediately after we founded a business corporation and registered the patents with the company name. The oncolytic squirrel poxvirus was licensed in South Korea, and reovirus and myxoma virus was patented in South Korea, China, and Japan. We are working on a U.S. patent as well.
Q: It must not have been easy receiving a VC investment only by obtaining a patent.
A: We received investment because it was known that we are the original technology developer for the patent technology. We are aware the entire history of the substances, their beginnings, and the ends because we conducted the research ourselves. However, researchers of companies that license candidate drugs become follow-up developers, who are very different from original developers. It 's hard to cope with problems if you don’t have original developers. If I take computers as an example, software developers can solve an error, but follow-up developers face limitation because they did not develop the drug from the beginning.
Initial investment went smoothly, but we will continue to need funds as we progress in clinical stages. If the government increases support, we will not have to worry about investments
Q: The new administration is strengthening the cultivation of bio businesses. Are there any suggestions you want to make?
A: Cancer treatment must become a national project. It brings certain benefits to citizens, so the country should fund it significantly. They should especially support startups more actively. ViroCure was lucky to receive VC investments, but many more ventures don’t receive funding. The government needs to play a role.
In selecting government projects, I wish that revolutionary new medicines would receive specialized funding separate from large corporations and generic and incrementally modified drugs. Korea has yet to release any innovative new medicines. The ripple effect of even one will be huge. A pharmaceutical corporation’s largest role is R&D, crucial to the release of a new drug. ViroCure is fulfilling that role. Please keep us on your radar.
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