Creative Commons/kaibara87

Bacteria viewed under a microscope

Dave Martin is one of the people in biotech who has truly seen it all. In the ’80s, the industry’s early days, he was head of research and development at Genentech. His latest passion, which he’s pursuing with business partner Jim Knighton, is taking shape at a lean startup in South San Francisco called AvidBiotics.

Their wager is that this small company could shake up more than one industry, starting with food safety and antibiotics.

“Jim and I are betting our future on this, financially and professionally,” Martin says. “It’s taken us several years to develop the level of confidence we have, and it’s really built on data and successes so far. We think we can make this into a significant entity.”

Fighting bacteria has been on Martin's mind for years; he learned about the field in detail while on the board of a leading antibiotics company, Cubist Pharmaceuticals (NASDAQ: CBST) based in Lexington, Mass. While antibiotics are one of the great medical success stories of the 20th century, they are now are chronically overprescribed and bacteria are becoming continually more resistant to treatment. A few biotech companies, like Cubist, have had some recent success in developing new small-molecule compounds that are effective against multi-drug resistant bacteria. Still, the Centers for Disease Control and Prevention estimates that 70 percent of hospital-borne infections are resistant to one or more classes of antibiotics. An estimated 90,000 people die from bacterial infections every year, and the infections costs the health system $4.5 billion annually.

All this got Martin, a biochemist, thinking about a different strategy a few years ago. After selling South San Francisco-based Eos Biotechnology for a little more than $37 million in 2003, Martin started looking around the academic world for novel ideas. He found an intriguing concept in Jeffrey F. Miller's University of California, Los Angeles lab, which was looking at defense mechanisms that certain bacteria use naturally to fight off other bugs. With some seed money from his own pocket and from friends and family, Martin rolled up his sleeves to see if he and his collaborators could engineer what are known as R-type pyocins (now branded by the company as Avidocins) that could mimic this natural phenomenon.

Ideally, these engineered proteins could be made to hit specific molecular targets on the surface of bacterial cells, punch holes in the cells and kill them with a single strike, Martin says. In particular, the proteins could be made to bind to target molecules that the pathogen needs to cause disease, so that even if the bacterium found a way to resist the killing power of the Avidocin, it would basically be harmless, Martin says.

“If the bug gains resistance, it loses virulence. That is the primary technology we have developed,” Martin says. “And we have [intellectual property] around it.”

The company really got going in 2005, when Martin called Knighton. They knew each other well, having worked together earlier in their careers when they were both at a joint venture of DuPont and Merck, then later at Chiron. Martin is the science guy, with long-standing credentials as a former faculty member at the University of California, San Francisco and a Howard Hughes Medical Institute investigator, while Knighton is a business guy with a Master of Business Administration from Wharton combined with a master’s degree in genetics.

“It’s a very complementary relationship,” Martin says. “We each have skills that the other hasn’t perfected yet.”

The founders liked the combination of the science and the practical aspects of starting a biotech company in the antibiotics field. In fields like cancer, autoimmune disease and cardiovascular disease, success in animal models often fails to predict success in humans. But animal tests of antibiotics tend to be a better predictor. That meant they could finance the company step by step, without raising huge amounts of venture capital and ending up burning it all on a dead-end concept.

So far, AvidBiotics has raised a total of $9 million, bit by bit, much of it from government grants. The company has raised a modest $2.6 million in equity from the founders, family and friends, Knighton says. Doing it this way encouraged disciplined management of the company finances, Knighton says.

“We raised $1 million at a time. We have a lot of skin in this game, and we want to keep our friends and family on our good side,” Knighton says.

Now that AvidBiotics has shown it can make its bacteria-killing proteins, it has started focusing in on specific applications. The initial plan is to go after E. coli O157:H7, the bug that has been known in a few infamous cases to strike via undercooked ground beef.

AvidBiotics has developed a “twofer” strategy against this nasty diarrhea-causing bug. The initial application is a spray-on formulation that would be used for beef carcasses, spinach, lettuce or other food products that you’d want to protect. The other formulation, an oral pill, is being developed to treat people who have gotten infected with the pathogen.

By leading with the food safety application, AvidBiotics is hoping to clear regulatory hurdles from the U.S. Department of Agriculture and the Food and Drug Administration in about 18 to 24 months — a far less arduous pathway than it would encounter through the drug-development route. And once that product reaches the market, it will help finance further development of the antibiotic treatment.

AvidBiotics’ anti-E. coli compounds have already shown that they can prevent infections, and treat active infections, in rabbit models, Martin says. Certain nonspecific chemicals can be sprayed on beef or vegetables today to fight bacteria, but AvidBiotics is banking on a couple key advantages. As a biodegradable protein, the new treatment has an environmental advantage. And by being specifically tailored for the bad bug, and leaving the rest of bacteria to do their thing in nature, the AvidBiotics approach doesn’t cause “collateral damage” against good bacteria, Martin says.

Besides going after E. coli, the AvidBiotics founders are working on programs to target specific bugs that cause all kinds of trouble for the health care system. One is pseudomonas, and another is Clostridium difficile, or “C. diff.” Another niche idea, believe it or not, is a targeted treatment for Yersinia pestis, otherwise known as the bubonic plague, which the U.S. government just might want to stockpile for biodefense purposes, Martin says.

Really pursuing any of these options is going to take some serious time, money and help from partners.

Martin and Knighton have lots of experience, which might lead them to think this is all pie in the sky. But once Martin got going he sounded almost like he was back in graduate school, on the cusp of the early biotech wave. He pointed out that the National Institutes of Health is pouring millions into a Human Microbiome Project that is seeking to catalog the vast diversity of bacteria. Over time, it could help scientists determine whether pathogens could be the hidden culprits at work in certain forms of diabetes, cancer, obesity and arthritis. Having super-specific proteins that can be made to knock out certain bugs in a laboratory could be a useful enabling tool for this scientific journey, he says. “It’s all really quite amazing what’s happening now,” Martin says.

Connect with Xconomy on Facebook or Twitter.