While most companies focus on terrestrial microbes for new discoveries, Nereus Pharmaceuticals Inc. is casting its eyes to the sea.

“We are founded to be a drug discovery and drug development company, and our sources of new compounds we feel come from a completely untapped source of chemical diversity,” President and CEO Kobi Sethna said of the San Diego-based company.

Just as the pharmaceutical industry has used terrestrial microbes to discover 100 to 150 blockbuster drugs in the past, it is now finding that the microorganisms from the soil are producing microbes with the same chemical structures over and over again, Sethna said. That leads to fewer new drugs.

Nereus is based on the findings of oceanographic scientist and chemist William Fenical, who, funded by the National Institutes of Health, reasoned that the sea might offer the same diversity that earth had for drug discovery. He brought the technology to venture capitalist Forward Ventures, which then hired Sethna to found Nereus, named for a benevolent and productive Greek god of the Aegean Sea. Sethna came on board in December 1998, but it was 2000 before the company began fully functioning. Nereus licensed the marine technology from Fenical.

Simultaneously, the company is focusing on new small-molecule cytokines. The goal is to take marine microbes and cytokines and discover new compounds. Nereus is predominantly focused on anti-infectives and anticancer drugs, and it has identified one microbe that seems to have anticancer properties. It is a microtubule inhibitor, NPI-2350a, which is a small-molecule antitumor agent that regulates microtubule stability by binding to sites on tubulin distinct from taxol or vinca alkaloids.

Its product pipeline also includes an oral TNF-alpha/IL-1 synthesis inhibitor named NPI-1302a-3 that has been shown to inhibit both TNF-alpha and interleukin-1 synthesis, which contribute to many inflammatory diseases such as rheumatoid arthritis and inflammatory bowel disease.

Sethna emphasized that Nereus is not a general natural products company. It is exclusively focused on microbes, as opposed to shellfish or snails or starfish. He noted that in the two years since the company was formed, it is seeing “hit rates” with microbes much more robust than with terrestrial microbes.

“We are seeing numerous new compounds that we are starting to identify and want to attempt to develop either alone or with potential partners,” Sethna said.

By the end of the year, Sethna plans to be in research partnerships or alliances to look at specific targets or specific therapeutic categories. The emphasis is on partnerships, rather than selling its libraries.

Sethna said he just wants his company to “capitalize on this extraordinary source.”