Receptor BioLogix might be a start-up company, but it already has a lead clinical product with which it will initially take aim at a treatment for gastric cancer - a disease that basically has no treatment, it said.

The company was founded earlier this year based on researchers' work at the Oregon Health & Science University (OHSU). The goal of Receptor BioLogix is to develop a new class of drugs to treat not only cancer, but also autoimmune and metabolic diseases.

In March and April, the university recruited former Genentech scientist Michael Shepard, who worked on Genentech's development of Herceptin, a drug approved by the FDA in 1998 for the treatment of breast cancer and that brought in revenue of $385 million in 2001. He also worked at Canji Inc., where he served as chief scientific officer and vice president of research.

The unifying link is that Herceptin is based on an overexpression of the HER-2 gene, and Receptor BioLogix's lead clinical product, Herstatin, also is based on HER gene overexpression.

Shepherd told BioWorld Today that there has been no progress made on gastric cancer "for the past 50 years," which essentially means there has never been any progress, he said.

Herstatin could change that.

It was discovered in the laboratory of Gail Clinton, professor of biochemistry and molecular biology at the OHSU School of Medicine, and John Adelman, senior scientist at OHSU's Vollum Institute and a member of the OHSU Cancer Institute. Clinton is the scientific founder and chief scientific officer of the company. Adelman also is a scientific founder and is chairman of Receptor BioLogix's scientific advisory board.

It was Adelman, who also worked at Genentech for several years, who connected Shepard with the start-up, Shepherd said.

Herstatin is a natural product that inhibits the functions of a family of oncogenes, including HER-1 and HER-2, which are implicated in several cancers. Researchers said Herstatin is produced by standard gene expression methods and is "likely to be nonimmunogenic," which would provide perhaps an easier path to FDA approval. It is an intracellular signaling protein that blocks activation of the entire EGF family of receptors. Rather than blocking the EGF receptor surface, Herstatin is activated within the cell, Receptor Biologix said, noting that preclinical studies have shown that Herstatin selectively blocks intracellular signaling triggered by EGF and transforming growth factor-alpha in about half of all cancers.

Also, the company has developed an intron fusion protein discovery platform, which is designed to leverage progress in human genome DNA sequencing and bioinformatics. Herstatin is an alternative product of the HER-2 gene that contains part of the HER-2 protein receptor itself fused to amino acid sequences encoded by an intron, a genetic code variation that is selectively expressed in normal cells and represents a newly discovered alternative means of gene expression. Therefore, Herstatin represents a new class of receptor modulators called Intron Fusion Proteins to be developed by Receptor BioLogix, it said.

The company will be looking to partner with biopharmaceutical companies "on a geographic basis," it said, with its initial focus being on a European partner.

Receptor Biologix, which is based in Portland, Ore., and San Francisco, has licensed selected applications of its technology to Incyte Corp., of Palo Alto, Calif., for its small-molecule cancer program, but Shepard could not be more specific than that, he said.

Shepard said the company is looking to raise $3 million in the near future. Longer term, it will seek to raise $12 million to $15 million in order to move to clinical trials, where it expects to be within two years.

OHSU provided $40,000 in seed financing to get Shepard on board part time and to pay for another employee. Shepard said he hopes to be at eight employees by the end of 2004. The company licensed the technology from the university, and in the deal, OHSU will receive milestone and royalty payments on any drug sales.

Asked if he had any final thoughts on the new business endeavor, Shepard said: "Please send cash. It's just like college."