Scripps Florida on Friday announced its second spinoff company of the young year, although this startup has a different flavor than the venture-backed company the institute announced last week.
The latest company, Calm Therapeutics, will seek a cure for Prader-Willi Syndrome, an uncommon genetic disease that causes children to overeat.
While Scripps Florida spinoff Expansion Therapeutics launched with $55 million in backing from blue-chip venture capital funds, Calm Therapeutics has no VC and will remain part of Scripps for now.
“We’re going to essentially run the company without hiring an external team,” said Matt Tremblay, vice president for technology development at the Scripps Research Institute. “We’re going to use the employees and capabilities we have built up at Scripps.”
Calm Therapeutics is backed by Josilyn’s Faith Foundation for Prader-Willi Syndrome Inc., a Palm Beach Gardens nonprofit. The startup is working on a potential drug to treat the insatiable hunger experienced by people with Prader-Willi.
Scripps hopes that by holding onto spinoffs longer in the drug development process, it can hang onto more of the revenues the company ultimately generates.
“We like this theme of taking drug development into our own hands,” Tremblay said.
Meanwhile, Doug Bingham, Scripps’ executive vice president, is looking for the institute’s royalty pipeline could turn on soon.
“We have some very significant royalties that are coming due in the next two years,” Bingham said.
If the new drug ozanimod achieves blockbuster status, it could generate tens of millions of dollars a year in royalties for Scripps — and provide relief from the ongoing financial challenges facing the nonprofit lab.
Scripps won’t say how much it stands to receive from sales of ozanimod, a drug that slows brain atrophy in patients with multiple sclerosis. Scripps discovered the drug, then partnered with Celgene to shepherd the medicine through clinical trials. The biopharmaceutical company expects to begin marketing the drug to MS patients in late 2018.
Celgene (Nasdaq: CELG) also is testing ozanimod as a treatment for ulcerative colitis, which is more common than MS. If ozanimod wins approval as a medicine for the intestinal disorder, sales could reach $4 billion to $6 billion a year.
Scripps says its royalty arrangement with Celgene is confidential.
Meanwile, Bingham reiterated the mantra that biotech requires patience. Former Gov. Jeb Bush in 2003 launched a billion-dollar investment in biotech, a bet meant to transform Florida’s notoriously low-wage economy.
“The research endeavor is a long-term game — it’s a long game, it’s not a short game,” Bingham said. “People who thought we were going to march in here and start spinning out companies right and left in the first year are misinformed about what it takes to do that.”
Bingham is moving from San Diego to Jupiter, and he said house-hunting here is harder than he expected. Twice, he has been beaten by bidders who made all-cash, full-price offers.
“This is like California-esque,” Bingham said.