In 'Entrepreneurial Spirit,' we delve into the reasons people started their businesses, the initial challenges they faced, and their aspirations for the future.
In our 42nd installment, we talked to Kanji Hosoda, president and CEO of PRD Therapeutics Inc., and honorary professor Hiroshi Tomoda, an external director of the company, about the challenges they face in their future business endeavors, together with insights from Taira Kobayashi, JAFCO's capitalist in charge.
【Profile】
Kanji Hosoda, President & CEO, PRD Therapeutics, Inc.
After completing his studies at the Graduate School of Medical Sciences of Kitasato University, Mr. Hosoda engaged in drug discovery from natural compounds as a special assistant professor at Kitasato University's School of Medical Sciences. He participated in NEDO TCP2019, hosted by NEDO, and received an Excellence Award. Subsequently, he participated in the Tokyo Metropolitan Government-supported accelerator program, Blockbuster TOKYO 2019. He established PRD Therapeutics Co., Ltd. in September 2021.
Hiroshi Tomoda, External Director, PRD Therapeutics, Inc.
After completing his studies at the University of Tokyo's Graduate School of Medicine, he served as a researcher and department head at the Kitasato Institute, professor at Kitasato University's Graduate School of Infection Control Sciences, and professor at Kitasato University's School of Medical Sciences. Even after retirement, he continued activities as a specially-appointed professor. He engaged in fundamental research, exploring new functional molecules of microbial origin (especially in areas of lipid metabolism and infectious diseases). He discovered over 100 novel compounds, including PRD001. He is an honorary professor at Kitasato University's School of Medical Sciences.
【About PDR Therapeutics, Inc.】
PRD Therapeutics, Inc. is a pharmaceutical venture originating from Kitasato University's School of Medical Sciences, dedicated to the research and development of pharmaceuticals for novel lipid metabolism disorders (such as HoFH and NASH/NAFLD) using PRD compounds. The company aims to translate promising drug discovery seeds found by the research group led by Honorary Professor Hiroshi Tomoda into practical applications. The company was founded by research fellow Kanji Hosoda and Honorary Professor Hiroshi Tomoda.
Bringing the promising drug seed PRD001 to practical use
─ Could you tell us about the business of PRD Therapeutics?
Hosoda PRD Therapeutics is a pharmaceutical venture originating from Kitasato University, dedicated to developing drugs using natural lipid metabolism control agents called PRD compounds.
We focus on the most outstanding PRD compound, known as PRD001. The development of pharmaceuticals using PRD001 is a significant advancement in the treatment of homozygous familial hypercholesterolemia (HoFH), a rare disease with an unmet medical need.
─ Lipid metabolism disorders are often associated with lifestyle diseases. Does it fall under the category of a rare disease?
Hosoda Patients with lipid metabolism disorders due to lifestyle diseases are prevalent, but there are also rare diseases where genetic factors cause lipid metabolism disorders. The incidence is one in 170,000 to 300,000 people. They are classified as a designated intractable diseases. Patients may undergo an early onset of arteriosclerosis, heightening their susceptibility to stroke and myocardial infarction beginning in their 30s.
Although many lipid metabolism regulators have been developed in the past, they are intended for patients with lifestyle-related diseases and have been reported to be ineffective or not providing sufficient benefits for patients with HoFH.
─ What kind of treatment are HoFH patients currently undergoing?
Hosoda For HoFH patients who cannot use lipid metabolism regulators, the current practice involves outpatient visits every 1-2 weeks for extensive treatments like plasma exchange therapy, where blood is filtered using a machine. The current situation involves considerable burdens for both the individuals and their families, considering the time and effort spent on hospital visits. We believe that enabling treatment with medication at home, without the need for hospital visits, would lead to a more fulfilling life for patients and their families.
─ Please tell us more about PRD001.
Hosoda PRD001 was synthesized about 30 years ago by professors at Kitasato University in the process of optimizing a new compound discovered in fungal cultures collected from the soil near Jingu Gaien by a group led by Professor Tomoda, who serves as outside director of PRD Therapeutics, under Professor Satoshi Omura of the Kitasato Institute. The compound was synthesized in the process of optimization by professors at Kitasato University and others.
The effectiveness of PRD001 has been proven in various animal experiments, including primates. It significantly reduces blood lipid levels (LDL-cholesterol, etc.) through a novel mechanism, revealing its potential to suppress the progression of fatty liver disease and arteriosclerosis.
By implementing pharmaceuticals based on a novel lipid metabolism regulators derived from natural substances, we believe that in the future, it could become a groundbreaking treatment not only for HoFH but also for non-alcoholic fatty liver disease (NAFLD) and non-alcoholic steatohepatitis (NASH), which are types of lifestyle diseases.
─ Could you share the motivation behind starting your own business?
Hosoda I am a graduate of Kitasato University, and I was a student at Professor Tomoda's lab. After completing my studies at the Graduate School of Medical Sciences, I worked as a special assistant professor, engaging in research for drug discovery from natural compounds, and I grew interested in pharmaceutical development. While I had the option to join a general company, the ongoing struggle to bring the promising drug discovery seed PRD001 developed by Professor Tomoda's research group to practical use left me uneasy. I started thinking about how we could somehow shape it into a pharmaceutical product, potentially helping numerous patients.
─ What is the ongoing struggle?
Tomoda Looking at the history of lipid metabolism regulators, there was a time when statins held an overwhelming position and many pharmaceutical companies were developing compounds to replace them as "post-statin" drugs. However, despite significant investment in development costs, the results were lacking. Over time, the enthusiasm for exploratory research itself waned. In this context, when we proposed the characteristics and potential of PRD001 to pharmaceutical companies, we faced difficulties meeting the high requirements, including human data, that pharmaceutical companies required. University research alone couldn't clear these requirements, and the result was that our proposals weren't accepted.
I had somewhat given up, thinking that developing a drug with PRD001 might be too challenging. However, about four years ago, around 2019, I received a suggestion from Mr. Hosoda. Instead of pursuing the traditional "post-statin" approach, he suggested shifting to an approach targeting rare diseases. We would launch our own pipeline-type drug discovery venture and advance PRD001 to the level demanded by pharmaceutical companies.
─ What preparations were made in the two years leading up to the founding of PRD Therapeutics?
Hosoda In preparation for establishing our pharmaceutical venture, we actively participated in events and programs supporting entrepreneurship. One of these was NEDO Technology Commercialization Program 2019, where we were fortunate to receive an Excellence Award. Additionally, we received the Global Entrepreneurship Award at Research Studio 2019 and participated in the incubation support program Blockbuster TOKYO 2019, which specializes in pharmaceutical and medical ventures and is supported by the Tokyo Metropolitan Government. Winning several awards boosted our confidence that the direction we were heading in was correct.
During these activities, we initiated collaborative research for incubation with Taiho Innovations, LLC, a corporate venture capital of Taiho Pharmaceuticals Co., Ltd., starting from August 2020. Termed as a venture discernment, we spent a year gathering various data on PRD001, such as safety and pharmacokinetics deficiencies, and developed strategies for clinical trials, disease selection, organizational structure, and intellectual property.
─ There must have been a consolidation of efforts in data collection, development strategies, and intellectual property strategies geared towards practical application during this period.
Hosoda Yes, I do believe so. Taiho Innovations, LLC, being a corporate venture of a pharmaceutical company, allowed us to structure the implementation system and trial plan for the practical application of PRD001 at the level demanded by pharmaceutical companies. Overcoming the significant divergence between the research data obtained at the university and the data sought by pharmaceutical companies was incredibly valuable. In the end, we achieved all the challenging goal items set at the pharmaceutical company level, leading to the establishment of PRD Therapeutics in September 2021.
JAFCO's assessment: Grounded in science and strategic analysis, free from of preconceptions
─ What initial impressions did JAFCO have of PRD Therapeutics?
Kobayashi In our initial web meeting, I sensed potential in the drug profile of PRD001, prompting me to meet Mr. Hosoda in person. Hearing about the business strategy for practical use from Mr. Hosoda, I felt that this could work.
What impressed me was the clarity of evidence ensuring objectivity. It wasn't based on emotions or preconceptions. It's all designed with a clear purpose. The essential data and their significance are clear, and the clinical designs carry meaningful intent. It's been structured with the big picture in mind, and I was impressed by the fact that Mr. Hosoda is a CEO who can speak about the future with science. Additionally, the incorporation of fundamental strategies that are commonplace in the United States into the pharmaceutical business strategy was noteworthy.
Later, when we received detailed designs for the clinical trial and biomarker strategy--aspects related to the clinical trial, which I consider to be the most challenging--they were at the level we were seeking. I remember telling them during our second meeting that we would proceed with our deliberations. In about a month, we obtained approval from the investment committee and swiftly conducted syndication with other investors, responding to the funding size and urgency that I believe Mr. Hosoda was seeking.
Hosoda The quality of business strategy and clinical trial design that Mr. Kobayashi appreciated was built steadily with Taiho Innovations, LLC during the seed round. We introduced a specialist in clinical development based in Boston through them, and this person joined as an advisor.
Through interactions with this expert, we were able to formulate cutting-edge strategies. Recently, with the enhancement of acceleration programs, opportunities to go abroad have increased. We conducted interviews with renowned HoFH and NASH specialists in the United States, confirming that our clinical development strategy was on the right track.
Kobayashi The strength of that network is also a result of Mr. Hosoda's capabilities. He has built relationships where he can receive fantastic advice from top-notch professionals in various fields. While terms like "support" or "follow-up" might convey a passive impression, Mr. Hosoda actively selects the right people and incorporates their expertise into his management.
It's Mr. Hosoda that has recognized top-tier individuals as such. I think that having the ability to discern reliable experts essential for the success of the business is one of the crucial qualities expected of a leader.
Tomoda I have spent time with him since he was a student, and I feel that he possesses not only the capabilities of a researcher but also those of a business leader. He learns a lot from each specialist, absorbing knowledge openly. That's why I entrust him with everything related to the company. I tell him to go ahead and try things in the direction he envisions.
─ What is your impression of JAFCO, Mr. Hosoda?
Hosoda I feel that JAFCO understands what we want to achieve and how we plan to achieve it. We are a drug discovery startup with a pipeline centered around PRD001, aiming for an eventual merger/acquisition with a pharmaceutical company that will bring PRD001 to practical use.
However, in Japan, the prevailing trend revolves around platform-type startups targeting IPOs, and there are few success stories of pipeline-type drug discovery startups, with limited M&A cases. Some VCs may not consider us for investment.
Additionally, in our pursuit of a merger/acquisition, we were conscious of building a small but elite team. However, in some cases, VC firms might not consider us for investment unless we have multiple C-level executives.
In this context, Mr. Kobayashi made a decision without preconceptions, evaluating us based on our science and strategic analysis. The trust that emerged from this is the reason we chose to work with JAFCO.
Proving the value of drug discovery from natural compounds and saving as many people as possible
─ What are your future plans?
Hosoda In September 2023, we successfully raised 1.3 billion JPY in a Series A round with JAFCO leading the investment. The primary objective is to complete the Phase 1 clinical trial in healthy human subjects.
While we have conducted various animal studies, including with monkeys, human trials are yet to be carried out. We aim to use the results of Phase 1 to strike a deal with pharmaceutical companies. To achieve this, we needed to understand what pharmaceutical companies seek in Phase 1. So, we have been meticulously considering the design of the Phase 1 trial with advisors from the pharmaceutical industry.
Since we have learned that pharmaceutical companies want to use the results of Phase 1 to determine the probability of success, and especially the efficacy in patients, in Phase 2 and beyond we measured key/secondary evaluation items for HoFH and NASH in the Phase 1 trial we designed. This allows us to predict the effectiveness of Phase 2 and beyond in humans early on and obtain early signs of efficacy by the end of Phase 1.
Having planned the study from the view of practical application and having its logic evaluated, we were able to obtain the necessary funds. I now view the next step as diligently proceeding with development.
─ Finally, what do you hope to accomplish as a CEO?
Hosoda One thing is to succeed as a CEO and become a presence that boosts Japan's venture ecosystem. If we can create successful examples of pipeline-type startups and M&A exits, it will contribute to expanding diversity. Leveraging my youth, I want to take on multiple challenges and activate the ecosystem by involving young people around me. Currently, I have many opportunities to talk with students. When they think about employment, the first things they think of are pharmaceutical companies or pharmacists. In a predominantly corporate employee mindset, I want to convey that there is also the option of joining a venture.
Drug discovery is generally perceived as something that only veterans in their 60s or 70s can do, but that's not the case. I want to convey that even young people can do it. The future that the first drug discovery venture from Kitasato University's School of Medical Sciences can show is significant.
As a researcher, I want to prove that drug discovery from natural substances, which Japanese pharmaceutical companies were once skilled at, still holds untapped potential. Unfortunately, many pharmaceutical companies are withdrawing from natural product drug discovery, but that's precisely why universities need to continue it.
This aligns with Professor Tomoda's research philosophy that universities should do what pharmaceutical companies don't. I see it as my responsibility to continue this legacy, bridging the gap between universities and pharmaceutical companies. I want to demonstrate the greatness of natural products, create exceptional compounds for pharmaceuticals, and deliver them to as many patients as possible.
Comments from the investment professional in charge, Taira Kobayashi
PRD Therapeutics is a pure pipeline-type clinical development startup driven by scientific data. To demonstrate clinical science for specific unmet medical needs, the company established a network capable of outlining preclinical data and clinical strategies, and it has successfully secured the funding it needed. Going forward, JAFCO will continue to support the efforts of Mr. Hosoda and his team to promptly and reliably deliver PRD001 to a greater number of patients and to maximize the proof of its pharmaceutical value.
