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LIFESCIENCELEADER.COM MARCH 2014 70 BIOPHARM DEVELOPMENT & MANUFACTURING insights EVOLVA TURNS AROUND ITS BUSINESS MODEL By K. J. Morrow Jr., Ph.D Evolva Turns Around Its Business Model: Swiss Biotech Opts Out Of Drug Development K . J O H N M O R R O W J R . , P h . D . Contributing Editor Drug development is a tough proposition for the biotechnology industry. The targets today are complex disease conditions whose molecular bases may be poorly or not at all understood. Potential pharmacologic agents that inhibit critical metabolic pathways will frequently generate unanticipated and life-threatening side effects. P reclinical screening of drug candidates may yield encouraging results based on data from lab animals and cell cultures that cannot be substan- tiated in clinical trials. And in Phase 1 studies on very small numbers of human subjects, positive data is often not con- firmed in expanded, double-blinded Phase 2/3 trials on large, randomly cho- sen populations. With so many barriers to achieving a successful new drug entry, it is hard- ly surprising that some biotechs have looked for alternative directions for their technological base. Evolva, a Swiss-based company, has turned from drug develop- ment to making ingredients of industrial and culinary value. Mr. Neil Goldsmith, CEO, explained that the company started with a traditional focus on drug devel- opment, but three years ago switched gradually to nutritional biotech, aiming at high-value food ingredients such as flavorings and spices that cannot be pro- duced through synthetic chemistry in a cost-effective manner. Evolva's technol- ogy is also being applied to the search for cosmetic components, such as natural pigments and colorants, yet the company still maintains a toehold in its original pharma commitments. EVOLVA'S STRATEGY FOR MOLECULAR DEVELOPMENT Evolva uses a yeast-based procedure to optimize the pathways for expression of small molecules. This approach is quite different from the conventional tactic that dominates the pharmaceutical and chemical industries. The Evolva technol- ogy uses yeast cells programmed with gene libraries in which billions of com- binations are expressed. These combina- tions can be tested by subjecting cells to a selective process in which the most efficient biosynthetic pathway for pro- ducing the target is favored. The rare cells that produce the desired compound or ingredient most readily can be detected by fluorescent reporter signals, and hun- dreds of these candidates can be set aside and the process repeated. Goldsmith explained Evolva's decision to move in the direction of nonpharma- cological molecules. At the company's inception, the focus was on various drug candidates, and nonpharma compounds were not a high priority. "However, we received a lot of interest from compa- nies outside the pharma sphere, notably a small company, Abunda," he stated. "Initially we viewed these inquiries as tangential to our main mission of drug development, but then we realized that what they were proposing would fit our technology better. There are no risks brought about by an adverse clinical out- come, there is a much shorter timeline of three to five years, and the cost to market is considerably less. So based on these factors, we decided this was a better busi- ness proposition. But it did not arrive as an overnight revelation; we started sev- eral years ago talking about what other ingredients we might go after." In considering the last few years of gradually turning the company in a new direction, Goldsmith continued, "In ret- rospect, reinventing the company looks obvious, but it didn't look obvious at the time, and it certainly didn't look obvious to our investors, so we had to persuade them that this change of direction was appropriate." "It was a very big decision. I am amazed that we were able to pull it off. We had to convince a number of people that we weren't completely mad, but rather the original thesis was flawed and we needed 0 3 1 4 _ I n s i g h t s _ B i o P h a r m . i n d d 1 0314_Insights_BioPharm.indd 1 2 / 1 9 / 2 0 1 4 2 : 4 7 : 1 9 P M 2/19/2014 2:47:19 PM