Antibodies that treat autoimmune diseases by inhibiting tumor necrosis factor have proved to be among the biggest biotech blockbusters.

Last year, Enbrel (etanercept, Amgen Inc.), Remicade (infliximab, Centocor Inc.) and Humira (adalimumab, Abbott Laboratories) generated global sales of $4.4 billion, $4.3 billion and $2 billion, respectively.

Yet while inhibiting TNF blocks the production of cytokines involved in autoimmune inflammation, it also can block regular immune responses and cause serious infections. Dios Therapeutics Inc. is hoping to avoid that problem by developing monoclonal antibodies that work upstream of TNF to target the antigen-specific processes involved in activation of an autoimmune response.

"As far as we know, what we are targeting is the most upstream event" in autoimmune disease activation, said Elizabeth Song, co-founder of Dios. "We're trying to prevent autoimmune activation itself rather than deal with the effects of that activation," such as inflammation, she explained.

Dios' target of choice is insulin-like growth factor 1 receptor (IGF-1R). That kinase has been implicated in several types of cancer, and companies such as Pfizer Inc., OSI Pharmaceuticals Inc. and ImClone Systems Inc. are developing cancer drugs that target IGF-1R. But research has shown that IGF-1R also plays a role in autoimmune disease: specifically, the binding of auto-antibodies to IGF-1R on fibroblasts can activate the autoimmune process.

To stop this autoimmune activation at its source, Dios is developing antibodies that bind and inhibit IGF-1R on fibroblasts. Initial trials will focus on thyroid-associated ophthalmopathy (TAO), a severe form of Graves' disease, but Song said Dios has evidence that IGF-1R also is involved in rheumatoid arthritis and Hashimoto's disease. The company also is exploring its possible role in Type I diabetes.

Glenn Albrecht, co-founder and CEO of Dios, said the company chose TAO as its initial indication because it is an orphan disease, but at just under 200,000 patients, it still represents a significant opportunity. Additionally, TAO is the specialty of co-founder Terry Smith, chief of molecular medicine at the University of California at Los Angeles Medical School's department of internal medicine.

Smith's research served as the basis for founding Los Angeles-based Dios. Albrecht, the company's only full-time employee, previously was vice president of molecular biology at Lynx Therapeutics Inc. Song, also a Lynx alum, now works as vice president of business development with EGeen Inc., a contract research organization. The three joined forces to found Dios in the second half of 2006, naming the company for Dioscorides, the Greek physician whose five-volume manuscript, De materia medica, guided pharmacological work for 16 centuries.

Albrecht said Dios intends to remain virtual for the time being, leveraging a network of consultants and advisers. The company has partnerships with an undisclosed pharmaceutical company to humanize its mouse monoclonal antibody, and with Peregrine Pharmaceuticals Inc. for process development and manufacturing services to support early clinical trials. If all goes as planned, Song predicted Dios will have Phase I/II data in about three years for lead antibody DS101 in TAO.

Dios' three co-founders have fully financed the company to date, but Albrecht said they are "looking for money to expand." Some of that funding is anticipated to come from the federal government. Albrecht noted there are grants available from the orphan drug office and that the NIH has "shown interest" in Smith's TAO work. External investors are part of the plan as well, and Dios is considering a seed round funded by angels or a Series A round funded by venture capitalists.