This Fungus Could Help Cure Cancer

(Bloomberg Businessweek) -- Maureen Hillenmeyer doesn’t know exactly what’s growing in her incubators, but she has high hopes. The rectangular plates in the backroom of Hexagon Bio are heated to 86F and filled with yeasts unlike any other. The fungal microorganisms have been painstakingly outfitted with custom-printed DNA parts that give ordinary baker’s yeast the capacity to make new compounds that could potentially cure disease. “When we know it’s making a molecule, then we go in and say, ‘Is that molecule doing something interesting to cancer cells?’ ” says Hillenmeyer, co-founder and chief executive officer of Hexagon, based in Menlo Park, Calif. “That’s the real field testing.”

The company’s approach to drug discovery is half computation, half biology. A team of data scientists uses proprietary algorithms to mine a trove of data extracted from the DNA sequences of more than 2,000 species of mushrooms and molds, known as the fungal genome. Hexagon then predicts which strings of DNA, or gene clusters, are most likely to produce specific types of chemical compounds. If all goes according to plan, the yeasts will generate about 100 compounds that are particularly lethal to certain types of cells and proteins, making them the sturdy foundations of new treatments for infectious diseases and cancer. As Hillenmeyer walks through an adjacent lab, she leans over to check on Anton—the robot that handles the liquid DNA—and notices an acrid aroma, one of the few signs of the process. “It’s a little fragrant today,” she says.

The chemical ingenuity of fungi often goes unsung, though almost three-quarters of all antibiotics and 49 percent of all anticancer compounds approved by the U.S. Food and Drug Administration originated with living organisms such as mushrooms and mold. Blockbusters including penicillin and statins, which lower cholesterol, came from fungi. Hillenmeyer began experimenting with yeasts at Stanford 15 years ago. She co-founded Hexagon with Brian Naughton, formerly of genetic-testing company 23andMe Inc., and biochemists Colin Harvey and Yi Tang in late 2016, not long after her team discovered 22 compounds that showed pharmaceutical promise.

So far, Hexagon has raised $8 million from private investors; it’s looking to hire more biologists and data scientists. “We have a computational approach that allows us to identify what these compounds evolved to do,” she says. “The statins, in particular, are drugs that we would have discovered if they hadn’t been found.” Those now yield about $10 billion in sales a year, but Hillenmeyer is looking elsewhere. “We want to move into new chemical space and disease space,” she says.

Genome mining has attracted hundreds of millions of dollars in investment as the cost to sequence DNA has shrunk and the capacity to store digitized biological data has surged, allowing researchers to expand their knowledge of the microscopic organisms that live almost everywhere on Earth, inhabiting soils, sea sponges, and the human gut. Although previous corporate efforts failed to produce commercially viable drugs—because of growing costs and a dearth of genome data—Hexagon’s generation of startups is poised to profit from advances in molecular biology and computational software.

“Things are accelerating like crazy,” says David Mead, co-founder of Varigen Biosciences Corp., a startup in Wisconsin that’s also developing specialized technology to mine microbes for new drugs. Biologists now take days to run experiments that once took him years to conduct. “Big Pharma tried this big DNA stuff about 10 years ago, and it didn’t go very well, because the tools weren’t quite ready, and so they gave up,” Mead says. “Hopefully, they’ll come back around and start noticing these things with the next generation of tools.”

In May, Lodo Therapeutics Corp. inked a genome-mining deal with a unit of Roche Holding AG for as much as $969 million. In January, Pfizer Inc. invested $162 million in a microbe-mining agreement with Adapsyn Bioscience Inc. of Hamilton, Ont. Startup LifeMine Therapeutics Inc., in Cambridge, Mass., scored $55 million in venture capital. Despite the influx of cash, gene mining won’t be a cure-all for the drug industry, says Terry Roemer, chief scientific officer of Prokaryotics Inc. Once a compound has been shown to have the right properties, a company still faces plenty of hurdles—regulatory and otherwise—in turning it into a lifesaving medication, says Roemer, whose New Jersey-based business uses genomic tools to study human pathogens and develop drugs that target disease.

Those obstacles have Hexagon looking for other ways to get an edge on competitors. Along with DNA sequencing and automated workstations, it’s also using new technology that helps make it cheaper and easier to synthesize a physical copy of DNA. Hexagon essentially downloads and prints copies of gene clusters rather than laboriously cloning that DNA from wild fungi. Once the data team picks out a set of genes, the company sends an order to a commercial DNA vendor that prints out custom strands. Back inside the Hexagon office, Brandon Burr, a software engineer, demonstrates how he can redesign a yeast with the press of a button. “I’m just dragging and dropping genes,” he says. A cure could be a click away.

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