Next big step in biotech

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This article was published 20/01/2024 (624 days ago), so information in it may no longer be current.

Turning the corner in Novel Biotechnology Inc.’s tiny lab space in a University of Manitoba downtown campus building that houses the school of dentistry, you may not even notice the research associate working on a computer in the corner.

But in this cramped Level II bio safety lab, Santhosh Kallivalappil and his team of scientists have developed a critical new tool for the global pharmaceutical industry that multibillion-dollar companies are already seeking out.

Kallivalappil, one the company’s four co-founders and its head of research and development, figured out a way to slightly alter a bacteria — called NBx — that has been shown to dramatically outperform e coli.

The pharmaceutical industry has only ever used e coli to grow the complex genetic material used to make gene therapies and vaccines.

Called plasmid DNA, molecules that exist in bacteria, they are the genetic “photocopier” that the pharmaceutical industry uses to effectively manufacture genetic codes used in medicines.

But now that the genetic codes have becoming increasingly complex, e coli just isn’t up for the challenge anymore.

As Pankaj Khanna, the CEO of Novel said, “There are hundreds of gene therapy companies developing new therapeutics. But the money and effort going into the discovery of new drugs is far advanced as compared to the technology required to manufacture these drugs. That means some new drugs cost so much to make that they become inaccessible to the people who need it. If people can’t use the drug then the development is worthless.”

That’s the challenge the company was trying to address and Kallivalappil was determined they would do the work in Winnipeg.

Patents have been filed and revenue is already being generated. Novel Biotechnology has shown companies how it works — growing up to 20 times more genetic material than e coli ever could and at a much faster rate — and now it is shipping its bacteria to pharmaceutical companies so they can test it in their own labs.

Khanna compares what they’re doing to the early years of the automotive industry.

“The Germans might have figured out how to make good cars but it was Ford that invented high-volume production,” he said.

After coming to Winnipeg to do post-doc work in cell and gene therapy in the first decade of this century, Kallivalappil wanted to get some experience in industry.

“But like others I found that there just weren’t a lot of opportunities like that in Winnipeg,” he said.

He went to Montreal to work at New World Laboratories. It was then he found that efforts to replicate genetic code using e coli was proving unsatisfactory. He was aware of another bacteria that could be used, but it needed to be genetically altered to make it work.

He and Khanna, a serial entrepreneur, were already friends. They teamed up and Kallivalappil convinced the company to set its lab up in Winnipeg so he could be with his wife and three children. (Khanna is based in Toronto and two other co-founders are based in Toronto and the U.S.)

A testament to the potential value of the work they are doing, the company has attracted international heavyweights to its scientific advisory board including a former deputy director of the U.S. Food and Drug Administration. It also lured the scientist who had originally discovered Novel’s bacteria (using it for another purpose) to come to work at Novel, leaving a job at a billion-dollar pharmaceutical company where he had 200 scientists reporting to him.

With help from the University of Manitoba’s Partnerships and Innovation office and Kallivalappil’s former colleague Prashen Chelikani, a professor in the department of oral biology, Novel Biotechnology had the lab space it needed.

In the fall, Novel raised $2.5 million from the co-founders and some angel investors, enough financing to cover at least a year.

But with patents pending and commercialization already under way, the company is going public after trying to keep below the radar to protect its discovery. (Because it is a starting material and not a finished product, it does not need to be licensed by the FDA or Health Canada.)

Khanna presented at the JP Morgan Healthcare Conference in San Francisco earlier this month, the largest health-care industry venture capital meeting in the world, and took meetings with 20 different VCs.

The hope is to raise more money before the end of the year.

Robert Werbowesky, from the U of M’s Partnerships and Innovation office (formerly called the Technology Transfer Office) was one of the people who helped find lab space for the company.

“We were glad to be able to help them get set up in Winnipeg,” he said. “It sounds like they have the opportunity to displace a standard technology that’s been in place for a long time. I’m really hopeful they succeed, for the sake of Winnipeg as well.”

Chelikani, who is leasing part of his lab to Novel, said, “I knew that Santhosh wanted to come back to Winnipeg and he knew the lab. I know that not only is lab space expensive, but so is the equipment and the equipment maintenance.”

Kallivalappil, who was part of the brain drain when he moved to Montreal, wanted to do something about that trend.

“We have the skills here, but people have to migrate elsewhere to work. I know that pain, I suffered myself,” he said.

Despite being able to lease another aisle of lab space in the basement of the U of M building, Novel’s next move is to find more space as commercialization ramps up.

Also, for insurance purposes, it’s already maxing out on staffers in the lab.

martin.cash@freepress.mb.ca