West Coast Editor

With a CEO who has held positions at GlaxoSmithKline plc and Onyx Pharmaceuticals Inc., Lead Therapeutics Inc. is poised to use the $17 million raised in a Series A financing for programs in cancer and infectious disease.

Incorporated around the middle of last year, Lead got its "first slug of funding" around mid-April, said Chairman and CEO Peter Myers. The just-completed Series A was led by Pappas Ventures and ProQuest Investments, with participation also by Mustang Ventures, based in China, where Lead plans to carry out most of its discovery research.

"There's hardly any small-molecule drug discovery done in China," which has tended to focus on natural products, herbal remedies and the like, Myers said. The country is a good source of synthetic chemists, who will need mentoring to "teach them the medicinal-chemistry game," he said.

"These people are working for the Mercks, Glaxos and Roches of the world, so the standard is pretty high," Myers said, mentioning the contract research organization WuXi Pharmatech, the booming CRO due to report third-quarter earnings in about a week. "I'm sure we won't be the last to do this."

WuXi, according to the BioWorld sourcebook China Biotech 2008, has "notably increased the trust of the international strategic and investment communities." Myers said WuXi is "already up to 2,000 people in a period of maybe seven or eight years."

Since its initial public offering in August, WuXi's shares almost have doubled, as investors catch on to the trend for pharma and biotech to save as much as half their costs by outsourcing research to China. Most of WuXi's revenue in recent years has come from U.S. firms, with a clientele said to include 70 firms, including nine of the top 10 pharma companies in the world.

Lead Therapeutics' name is intended as an acronym standing for its plan to "Leverage" the strengths of the U.S. and China, "Eliminate" weakness and risk in the conventional drug discovery paradigm; "Anticipate" global trends and changes; and "Deliver" high-value drug candidates.

"We've just placed our first chemist in China to oversee what we're doing," said Myers, who headed the chemistry team at London-based GSK that discovered Avodart (dutasteride), a 5-alpha reductase inhibitor for benign prostatic hyperplasia, and who started the program that led to Emeryville, Calif.-based Onyx's discovery of Nexavar (sorafenib) partnered with Bayer HealthCare Pharmaceuticals, of Wayne, N.J.

The European Commission recently granted marketing authorization to Nexavar for hepatocellular carcinoma. An oral multikinase inhibitor already cleared in more than 60 countries for advanced kidney cancer, the drug is the first systemic therapy for HCC, and more regulatory filings are under review in other countries, including the U.S. Onyx reported $81.3 million in second-quarter income from the product, up 34 percent from the first quarter and 150 percent from the year-ago period. (See BioWorld Today, Aug. 9, 2007.)

In Lead's pipeline, the more advanced of the two preclinical programs is the infectious-disease push, which will focus on antibacterials, Myers said. He declined to disclose the target in oncology.

Sofie Qiao, president, chief operating officer and director of Lead, formulated the business plan and incorporated the firm, assembling the team that includes her as well as Leonard Post, who also worked on Nexavar at Onyx (after Myers) and has served as vice president of discovery research at Parke-Davis, now part of Pfizer Inc.

Daniel Chu, vice president of chemistry for Lead, brings more than 35 years of research and development experience in small-molecule discovery, including more than 20 years at Abbott.

Jerry Shen, vice president of biology, has more than 17 years in R&D, at Onyx and in academia.