Zygogen LLC

Buoyed by the continuing interest in zebrafish as a model organism for comparative genomics research, Zygogen has developed fluorescent transgenic zebrafish lines it uses to identify and validate new targets and screen drugs.

Zebrafish for genes and screens

• 24 Peachtree Center Ave. NE

• Atlanta, GA 30303

• Phone: [phone]

• Fax: [phone]

• E-mail/Web site: [email protected]

• Contact:Nina Sawczuk, CEO

• Industry Segment:biotechnology

• Business:drug discovery and screening; comparative genomics

• Founded:July 1999

• Founder:Shuo Lin, PhD; Nina Sawczuk

• Employees:9

• Financing to date:$700,000

• Scientific Advisory Board:Shuo Lin, PhD, chairman (University of California, Los Angeles [as of August 1]); J. Claude Bennett, MD (BioCryst Pharmaceuticals Inc.); John Hardin, MD (Albert Einstein College of Medicine, NY); Marnie Halpern, PhD (Department of Embryology, Carnegie Institute of Washington, Baltimore); Didier Stainier, PhD (University of California, San Francisco)

The inch-long, striped tropical zebrafish (Danio rerio), long a fixture in aquariums, has also evolved over the past ten years to become a staple in comparative genomics—the use of model organisms to identify homologs of human genes linked to disease processes.

Other model organisms, such as the worm C. elegansand the fly Drosophila, do not possess many of the complex organ systems found in higher organisms. The zebrafish, on the other hand, is a vertebrate with blood, kidney, and optical systems that share many features of human organ systems. Having a model organism whose developmental processes and organogenesis mirror those in humans facilitates the study of those activities and provides an opportunity for creating relevant disease models. In blood cell formation, for example, mutations in the zebrafish genome closely resemble anemia or thallasemia. And importantly, zebrafish embryos are translucent, making it easier to observe phenomenological changes that result from perturbations of any kind, including genetic mutations and exposure to small-molecule toxins. (The lab of Christine Nusslein-Volhard at the Max Planck Institute for Developmental Biology has identified more than a thousand zebrafish mutations.) Plus, zebrafish are abundant; females can lay up to 200 eggs per week.

But despite their intuitive appeal, few companies have made zebrafish the core of their comparative genomics technology platforms. The vertebrate has been the focus mostly of Artemis Pharmaceuticals GMBH , founded by Nusslein-Volhard and now a division of Exelixis Inc. , and DeveloGen AG . (Exelixis, which helped form Artemis, recently acquired the 85% of the company it did not already own in a stock transaction worth roughly $21 million based on Exelixis's stock price at the time [See Deal].)

Now, Zygogen LLC has come along with a proprietary technology it believes will broaden the use of zebrafish by shortening research timelines and reducing costs. Instead of performing multi-year large-scale genetic screens, Zygogen uses fluorescent transgenic fish lines to identify and validate new targets and screen drugs—within pharmaceutical drug development timelines. Called Z-Tag, it is a system for tissue-specific expression of a fluorescent label in zebrafish. Zygogen has developed transgenic zebrafish lines that fluoresce in the blood, neurons, thymus, and olfactory system. It is also in the process of designing additional lines that will express a fluorescent marker in tissues including liver, kidney, skin, muscle, bone, platelets, pancreas, heart, blood vessels, and specific subsets of neurons. Using the entire panel, and also a multi-fluorescent-organ fish in development for more streamlined analysis, the company expects to be able to screen for an array of gene and small-molecule functions as well as toxicity.

CEO Nina Sawczuk's first look at Zygogen's technology came in the spring of 1999, when she encountered Shuo Lin, the inventor of Z-Tag. Lin, a professor at the Institute of Molecular Medicine and Geneticsat the Medical College of Georgia (MCG), had been talking with the Advanced Technology Development Center, an incubator of Atlanta-based technology where Sawczuk worked, about starting a company. "It met all of the criteria on my checklist for a start-up," she says: Z-Tag was more than a single-product idea around which to found a company; the technology was ripe for commercialization (it was neither too early nor too late, and competition was enough to validate but left room for additional players); the science was first-rate and had already attracted the interest of companies; government support for transgenic zebrafish technology was increasing dramatically; and its inventor wasn't too much of an ivory-tower type—Sawczuk intuited that Lin had the right personality to be the driver of a commercial organization.

A few months later, in exchange for a small single-digit stake in the company, MCG licensed to Zygogen exclusive rights to a patent application claiming both composition of matter and methods for tissue-specific expression of genes in zebrafish, including but not limited to fluorescence. Zygogen is also adding to that core technology: Sawczuk says the company is currently in the process of licensing a second zebrafish fluorescence technology that works hand in hand with Z-Tag—a fluorescent assay out of the lab of Stephen Farber, PhD, of Thomas Jefferson University . Farber's technology, the Z-Lipotrack, uses fluorescently labeled lipid substrates, such as PLA2 and cholesterol, to track the gastrointestinal processing of lipids and enzymatic function of lipases in vivo. (The zebrafish gastrointestinal system matures in a manner akin to higher vertebrates.) Farber's lab recently published results showing that the cholesterol-lowering drug atorvastatin (Lipitor) works in the fish as well as in humans, as demonstrated by its interference with the processing of fluorescently labeled cholesterol in the fish.

As Z-Lipotrackdemonstrates, homology with human genes is but one facet of the commercial appeal of zebrafish. "The flexibility zebrafish gives us in target identification, screening, validation, and toxicity testing," Sawczuk explains, "makes it a more broadly applicable tool than other model organisms."

While Sawczuk admits zebrafish genomics is not for modeling every disease, she expects the technology to provide Zygogen with a few key patented assays that other model systems can't mirror. Angiogenesis is one such area. "Zebrafish eggs develop outside the mother, and we can label blood vessels and track their formation," she points out. "We can't do that in a mouse." Human VEGF has been shown to have a similar effect on their embryos as on humans. Blood clotting in zebrafish also mimics the human, notes Sawczuk, which may be useful in the study of thrombosis, as is the growth and degeneration of neurons, for modeling Parkinson's disease and other neurodegenerative conditions; Zygogen has filed a patent on an assay for neurodegenerative diseases.

In the near term, to fully exploit zebrafish for target validation, Zygogen expects to develop stable gene knockout/knockdown technology. It is also actively seeking a strategic partner with which to develop microarrays with content culled from zebrafish genes. "The field is still early," Sawczuk says, "and we're continuing to develop tools," including methods for gene validation, regulation, and expression.

To that end, Zygogen has entered into a strategic technology sharing partnership with NuTec Sciences[See Deal], which created algorithms for the Human Genome Project and specializes in the conversion of imaging data for computational analysis, to develop a proprietary zebrafish database, Z-Base, with private and public sequence data—information Zygogen intends to sell to subscribers and use internally for drug development. NuTec, along with IBM, is also currently building the largest privately owned supercomputer, in Atlanta, to which Zygogen will have direct access.

The company should also benefit from an ongoing initiative announced last November by the Wellcome Trust to sequence the zebrafish genome at the Sanger Centre , a leading DNA sequencing lab located on the Wellcome Trust Genome Campus and a major participant in the Human Genome Project. And to further extend its capabilities, Zygogen has a relationship with Tsinghua University in Beijing for mutagenesis and screening, which Sawczuk points out could cut by ten-fold the labor costs of mutational analysis.

But at its core, Zygogen wants to be a discoverer of drugs: "The real value," Sawczuk acknowledges, "lies in finding targets and compounds." Partnerships will not only generate revenues with which the company will fund internal discovery programs, she believes, but will also provide valuable two-way interactions. "We're experts in zebrafish, and they know about human disease. Partnering will help us both achieve our goals." In addition to technology development deals such as the one with NuTec and a brand-new collaboration with Ariad Pharmaceuticals Inc. to apply that company's gene regulation technology to zebrafish [See Deal], Sawczuk would also like to ink two or three multi-year partnerships focused on at least two disease areas in the next two years.

The company has raised $700,000 in seed capital and is currently working on a second round of financing. Sawczuk would like to raise $4 million by year-end, but also acknowledges that "potential partners are a little ahead of the VCs" in grasping the power of the zebrafish approach. "So we're looking for validation of our revenue model via a deal with a product-oriented pharma or biotech."

Sawczuk is also confident that Zygogen's technology will differentiate the company from competitors. "Forward genetics is powerful, but Artemis's timelines and costs are higher than ours," she asserts, "in part due to its emphasis on large-scale mutagenesis," in which males are exposed to a chemical that induces changes in sperm cell DNA with the expectation that the mutations will be carried through to the offspring and subsequent generations. "Large pharma companies and biotechs have told us that the timelines and cost structures proposed by Artemis are not aligned with those of their disease groups. Our Z-Tagand Z-Lipotrack technologies give us greater specificity and selectivity and rapid phenotypic read-outs when compared with traditional mutagenesis." In fact, she points out that Artemis has shifted from using the academic screen that formed its initial core technology and has moved toward use of a second, more disease-focused approach more in line with Zygogen's.

Before co-founding Zygogen, Nina Sawczuk was with the Advanced Technology Development Center in Atlanta, where she built the foundation for EmTech Bio, a technology incubator. She has also worked at Genetics Institute Inc. and Vertex Pharmaceuticals Inc. The lab of co-founder Shuo Lin at MCG was the first to generate tissue-specific transgenic zebrafish that recapitulate endogenous gene expression patterns.—MLR