Archive for Friday, December 19, 2003

Pharmaceutical company lands $15 million deal

Deciphera has high hopes for Lawrence venture

December 19, 2003

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Matt McClorey has 15 million new ways to convince people the area's life sciences movement is for real.

McClorey, chief executive of the Lawrence Regional Technology Center, and officials with Lawrence-based Deciphera Pharmaceuticals said Thursday the fledgling drug development company had completed a deal for $15 million in private financing.

The funds, from Kansas investors who declined to be identified, is in addition to $1.5 million in financing the startup company received in April.

McClorey and others who want to see Lawrence become a hub for life sciences firms and the high-paying jobs they attract are hopeful the deal represents a new chapter in a success story.

Deciphera moved to Lawrence in February from Cambridge, Mass., one of the nation's most established life sciences areas. Kansas University research facilities, an educated work force, hiring incentives and tax breaks from the city, and a better quality of life were cited as reasons for the move.

And with the company's founders, scientists Daniel Flynn and Peter Petillo, came research they say is groundbreaking because instead of leading to development of a single drug, it could lead to hundreds.

Projects in progress include drugs to treat Alzheimer's disease, various forms of cancer, arthritis and diabetes.

"We're engineering drugs to do what drugs have never done before," said Flynn, a native Kansan and KU graduate. "That's why we're excited. That's why the investors are excited."

And McClorey is excited because he thinks Deciphera could be the company that becomes successful enough to put Lawrence on the national map to attract other life sciences companies.

"We really need a success story," said McClorey, whose group helps technology startup companies with business planning. "People in Lawrence have been talking about the potential in Lawrence for a long time.

"But now we have a company that has relocated, raised a lot of money and hit all their targets. This could be the company that pulls it all together for Lawrence."

Employment potential

Even for Lawrence residents who know or care little about the life sciences movement, the Deciphera deal is important. The reason: high-paying jobs.

The company is expected to become the sort of employer that can cut the number of Lawrence residents who commute to Johnson County for better jobs. Deciphera plans to have at least 35 employees by 2006, and Flynn said about two-thirds of the positions would be for Ph.D.-level scientists.

The company now is hiring for positions with starting salaries from $50,000 to $60,000 annually, but Flynn said he expected the company's average salary to increase to about $90,000 a year.

"This is another cause for people to look at Lawrence not only as a fabulous place to live but as a place to orient their career and spend their workday," said Lavern Squier, president of the Lawrence Chamber of Commerce. "This imports wealth into our community."



About Deciphera

Address: 1505 Wakarusa DriveEmployees: six full-time, two part-timePurpose: The company is conducting research on how proteins in the human body react to various diseases. The company believes it has found a way to control a key "switch" in proteins that could help treat up to 200 diseases. It currently is working on four projects that could create drugs for Alzheimer's disease, diabetes, arthritis and various forms of cancer.

The company is not a sure-fire success, though. It is still small, with just six full-time and two part-time employees. It is adding about one employee per month, Flynn said.

And Lawrence has seen how fickle the life sciences industry can be. Deciphera is located in offices at 15th Street and Wakarusa Drive that previously were home to Oread Inc. In the late 1990s, Oread, a drug development company, received much of the same hype Deciphera now gets -- as the company that would make Lawrence a major player in the industry. Oread grew to about 225 employees in Lawrence before it went bankrupt and dissolved in 2002.

Diversification

Deciphera apparently is attracting wide interest from investors because, unlike many startup drug companies, it is working on more than one drug. Flynn and Petillo said that was because their research made what they believe to be a new discovery about proteins in the human body.

Through their research, they discovered that patients with several types of diseases had similar protein problems. Specifically, what they call the proteins' "switches," which determine when the proteins are active and nonactive, did not properly function. Once the pair made that discovery, they were able to begin developing a drug platform system designed to treat that specific area of the protein.

"We think we solved the Rubik's Cube," Flynn said in February. "We think we have found the reason why nature sometimes goes amuck in our bodies."

The company has taken its research and received patents for four projects.

Flynn said the company was in discussions with five major pharmaceutical companies about creating partnerships to bring drugs to market. He declined to name them. He estimated the earliest the company could bring a drug to market would be in 2011.

If successful, the financial implications could be huge. Flynn estimated that the four projects, once completed, could generate drug sales of $50 billion a year for the pharmaceutical industry.

But Petillo, the company's chief science officer, said he believed the scientific implications could be even bigger.

"I'm not going to say we're going to cure all these diseases, but I think we can have a big impact on the quality of people's lives," he said. "It is the reason one goes into science."

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