Startup drug firm lands veteran help: Immune Works, a fledgling firm with a promising lung drug, attracts former Indiana Health Industry Forum leader Lange

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A startup firm using Indiana University medical research to treat a fatal lung disease is raising money for clinical trials and has recruited a prominent life sciences veteran to lead the effort.

Michael Klemsz, an associate professor at the IU School of Medicine, and Dr. David Wilkes, director of the school’s Center for Immunobiology, founded Immune Works LLC in January 2006 along with Ronald Meeusen.

Meeusen, a former Dow-AgroSciences researcher and BioCrossroads executive, served as a part-time president and CEO while juggling his consultancy. But now, as Immune Works enters a critical phase of its existence, the group has hired Wade Lange to assume full-time leadership.

Lange, hired July 13, piloted the Indiana Health Industry Forum for five years, leaving in 2005 to form Lange Advisors, a consultancy focusing on the medical and life sciences sectors.

Attracting such a high-profile presence as Lange shows Immune Works has real potential, said John Thornburgh, cochairman of Ice Miller LLP’s private equity and venture services group. The law firm helped Immune Works spin its technology into a company.

“With Wade coming on board, you see someone who’s been out front in the life sciences industry willing to bring his skills to an early-stage company,” Thornburgh said. “We think that this is a product that is going to have a real prospect of getting to the market in the near future.”

Lange is tasked with raising funds for the first phase of trials slated to begin next year. The researchers met with U.S. Food & Drug Administration officials in late May to review preclinical trial plans and should file their Investigational New Drug Application with the agency in March.

It’s not unusual for pharmaceutical companies to spend $150 million getting a product to market, but executives think Immune Works can do it for a third of that. A combination of grants and venture capital is being sought to complete three phases of trials within a five-year span. If successful, the product could be on the market in 2013.

“We’ve done animal studies, and we know it works there,” said Klemsz, an immunologist and microbiologist at IU since 1991. “We realized we needed someone to drive this forward, so we hired Wade.”

Saving lives

Immune Works sprang from Klemsz’ ambitions to combine his research with an interest in entrepreneurship. Several years ago, he enrolled in a class taught by local tech guru Scott Jones meant to help MBA students and academics parlay their studies into a startup.

Klemsz wrote a business plan concentrating on autoimmune diseases and sought out Wilkes, who had conducted similar research relating to the rejection of lung transplants. Wilkes is seeking a patent for his intellectual property that is the crux of the company they launched in 2004.

The pair then brought aboard Meeusen as a partner. He is managing director of Indianapolis-based Mid-Point Food & Ag Fund LP who became acquainted with the researchers while at BioCrossroads.

The triad’s impressive array of expertise convinced Lange to join them, he said. Immune Works has an office at the IU Emerging Technologies Center on West 10th Street and may lease lab space somewhere within the next six months.

“We have a disease for which there is no effective treatment,” Lange said. “Mike, Dave and Ron are guys I have a ton of confidence in. Just knowing the team dynamics are solid was important as well.”

The partners initially targeted lung transplant recipients who they thought could benefit by taking the therapy to lower the rate of organ rejection. But after learning just 1,500 lung transplants are performed annually in the United States and Canada-a number too low to warrant a huge investment-they expanded their attention to the larger market of idiopathic pulmonary fibrosis patients.

It is estimated that more than 200,000 people have the disease in any given year, including 40,000 who die annually, according to the Pulmonary Fibrosis Foundation in Chicago. IPF involves scarring of the lungs in which the air sacs are replaced by fibrotic tissue. When the scar forms, the tissue becomes thicker, causing an irreversible loss of the tissue’s ability to transfer oxygen into the bloodstream.

During a lung transplant, the type V collagen molecule becomes exposed and attacked by the body’s immune system, leading to the destruction and rejection of the allograft. Moreover, IPF patients reject a lung transplant at an even higher rate, Klemsz said.

Immune Works’ intellectual property licensed from IU is a therapeutic molecule for patients who have an autoimmune response to the type V collagen. Lungs scarred by IPF could stabilize enough to delay, or even negate, the need for a transplant. Klemsz is unaware of anyone else who has identified the therapy as a potential mechanism to treat the disease.

“It’s a very exciting therapy,” said Reed Tarwater, director of pharmaceutical consulting services at The Anson Group LLC in Carmel, which is helping Immune Works navigate regulatory waters. “[IPF’s] an underserved disease state that is fatal, and we very much think [the therapy] will work.”

Funding sought

Immune Works so far has received seed funds in the amounts of $250,000 from an angel investor and $75,000 from the IU Medical Group Foundation Inc. Seed money is available from the group for early-stage investments based upon intellectual property from the School of Medicine.

About $500,000 a year has been allocated to the foundation supported by a percentage of funds from patient medical bills, said Dr. Craig Brater, dean of the School of Medicine.

“It’s sort of like angel or seed funding to help them get things off the ground,” Brater said, “and hopefully propel them on their way to further success.”

Immune Works is seeking grants for the first phase of trials and venture capital for later stages. Venture capitalists normally wait to get involved until after they can better judge their return on investment.

The company has applied for grants from the Indiana 21st Century Research and Technology Fund-the state’s showcase program for investments in budding high-tech firms-and the federal Small Business Technology Transfer program.

Lange’s background includes broad experience in the areas of clinical research, marketing, business development and general management in the pharmaceutical, medical device and health care sectors.

Before his five-year tenure at IHIF, Lange served 13 years as general manager of Walker Clinical Evaluations, a subsidiary of locally based Walker Information Inc., which was later sold to Pennsylania-based West Pharmaceutical Services Inc., a developer and manufacturer of drug-delivery components that has a location in Frankfort. Lange started his career at Eli Lilly and Co., where he spent six years in sales, market research and new-product marketing. A portion of his work involved the blockbuster drug Prozac.

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