How two persistant scientists brought the U-M a $65 million payday
by Ken Garber
In 1988 Jim Shayman, a thirty-four-year-old assistant professor in the U-M medical school, faced a critical career decision. Recruited to Ann Arbor two years earlier, the kidney specialist and biochemist had decided not to continue in his chosen field of research--not because it wasn't fruitful, but because it was exploding. As a new investigator with a tiny laboratory, Shayman didn't want to compete with the large labs entering the field.
He was searching for something else to work on the day he boarded a bus headed for a U-M research retreat near Kalamazoo. Shayman found himself sitting beside a bearded, bespectacled man twice his age. "I had no idea who he was," recalls Shayman. "We just started talking. He did most of the talking."
Shayman's loquacious bus companion was biochemist Norm Radin. Their two-hour conversation on the bus continued through the weekend retreat. "By the time Sunday afternoon came around," says Shayman, "we had established a collaboration." And Shayman had his new research direction.
The Radin-Shayman partnership would develop an entirely new kind of therapy — and prove extremely lucrative for the university. In 2014, a drug conceptualized by Radin and perfected by Shayman was approved for sale by the FDA. Called Cerdelga and brought to market by the biotech company Genzyme, it is now a standard therapy for treating type 1 Gaucher disease, a rare disease where lipids, molecules that dissolve in oil but not in water, jam white blood cells. The swollen cells accumulate in various organs, often leading to disability and death.
That same year the U-M sold 75 percent of its Cerdelga royalty stream to PDL BioPharma for $65.6 million. License revenue from all the U-M's inventions combined had totaled just $18.5 million the previous year. Cerdelga is the only currently marketed FDA-approved drug discovered at Michigan.
The deal made fiscal 2015 "a record year for the university" in licensing sales, says U-M tech transfer licensing director Bryce Pilz. "A lot of great things have come from the money and will come from it." The U-M also gets ongoing royalties. The tech transfer office didn't respond to a question about the amount, but, based on Cerdelga's reported sales, it should be well over $1 million a year — and growing fast.
'Substrate reduction therapy'
That 1988 bus conversation was only one of a series of chance events on Cerdelga's forty-year path from conception to financial windfall. Radin, who died in 2013, came to the U-M in 1960 not to develop a drug but to research the brain. Radin's interest in lipids originated at a job with the Association of Soap and Glycerine Producers that helped put him through graduate school in biochemistry at Columbia University. (Science fiction writer Isaac Asimov was a fellow grad student.) Radin focused his academic research on an obscure class of lipids abundant in the brain, and in 1960 he joined the U-M's Mental Health Research Institute (now the Molecular & Behavioral Neuroscience Institute).
"He had in mind making the world a better place, and the brain is the place to concentrate [on doing that], is how he felt about it," says Bernie Agranoff, a retired U-M neuroscientist who met Radin in the early 1950s and convinced him to come to Michigan. Radin was looking for "a way to make people smarter," says Agranoff. "And I'd always argue with him [that] there were some pretty smart people in Nazi Germany."
Radin never found a way to make people smarter, but he was a highly productive biochemist. Over the years, he worked out the cellular pathways for the creation and degradation of many important lipids, including some that accumulate abnormally in the brain and in other organs and cause "lysosomal storage" diseases. In these diseases — Tay-Sachs is the best known — enzymes that normally break down waste products are missing or deficient, allowing the wastes to accumulate in various organs, often disastrously. "In diseases like Tay-Sachs, these lipids pile up like garbage," explains Agranoff. For researchers seeking treatments, the questions were, "How do you prevent it from forming? How do you break it down?"
Thanks to Radin and others, we now have some answers. Biochemist Roscoe Brady, at the National Institutes of Health, pioneered the breaking-down approach, known as "enzyme replacement therapy." It provides the enzymes needed to dismantle the accumulated wastes, which physicians call "substrate." Since 1991, Genzyme has marketed a purified enzyme, now called Cerezyme, to treat Gaucher disease. But twenty years earlier, Radin had proposed a radically different idea: blocking the synthesis of the cellular waste products so they are never created in the first place.
Few thought such "substrate reduction therapy" would ever work, but Radin pursued it. He soon focused on Gaucher disease.
In Gaucher, an enzyme deficiency causes a lipid substrate to accumulate in white blood cells, leading to symptoms ranging from an enlarged spleen and liver to anemia, bone disease, lung fibrosis, and cancer. Another U-M biochemist, Saul Roseman, working across the street from Radin, discovered the enzyme that generates the substrate, and Radin set about finding a drug to block that enzyme.
He was quite alone. Greg Grabowski, a lysosomal storage disease expert then at Mount Sinai hospital in New York, remembers Radin presenting his substrate reduction concept at a 1982 Gaucher meeting. "Nobody paid a whole lot of attention to it," Grabowski says.
Radin had no formal training in medicinal chemistry, but he imagined that a drug that worked against the enzyme could resemble the part of the substrate that the enzyme latches onto, blocking that interaction. Radin searched the Merck Manual, a medical reference, for a chemical structure that might do this. He found the antibiotic chloramphenicol and modified it to create his first effective compound. But while it blocked its enzyme target, it wasn't potent and specific enough to work safely in human patients.
'I was asking myself, what am I doing here?'
Fortuitously, it was at this point that Radin and Shayman met on the bus to Kalamazoo. Radin's expertise in lipid biochemistry meshed well with Shayman's medical experience, which included post-doctoral work in pharmacology. Shayman recalls that he agreed to the partnership because he considered Radin's enzyme-blocking compounds useful for laboratory studies into lipid biology, and he was eager to learn from Radin's expertise. But from that very first conversation he was skeptical that a drug based on blocking substrate formation could work.
"I thought that part was bullshit," Shayman admits. "I thought this makes no sense from a medical point of view." A drug that blocked substrate formation in Gaucher, he knew, would prevent the formation of dozens of other lipids and also cause a lipid precursor to accumulate, both effects presumably bad for patients. The result, it seemed, would be a drug too toxic to do any good. It took eight years and countless arguments before Shayman accepted that Radin's approach would work safely, because the body easily compensates for both effects.
A large man with wavy gray hair, solid frame glasses, and a slightly rumpled aspect, Shayman grew up outside Chicago. His undergrad degree at Cornell, in philosophy, "helped me think about things in a more rigorous fashion," he says. Medical school and residency at Washington University in St. Louis introduced Shayman to dozens of prominent physician-scientists — eight different Nobel Prize winners worked or trained in a single lab at Wash U — and Shayman decided to pursue a research career.
When Shayman arrived at Michigan in 1986, the medical school here also had many young stars, including Francis Collins (now director of the National Institutes of Health), Jeff Leiden (head of Vertex Pharmaceuticals), and Gary Nabel, now the chief scientific officer at the French drug company Sanofi (which, coincidentally, acquired Cerdelga after taking over Genzyme in 2011). "I was asking myself, what am I doing here?" Shayman recalls. "I had a lot of questions about whether I could be ultimately successful, but I was also not trying to hit grand slams." Shayman figured that he could always just practice medicine if the research with Radin didn't pan out.
It almost didn't, multiple times. In the mid-1990s Shayman's lab laboriously synthesized and tested chemical variants of Radin's compound and found some potent and specific enough to be real drug candidates. The two men filled out standard invention disclosure forms with the U-M tech transfer office, then waited, expecting a patent application to be filed. They "didn't get any response for maybe four to six months," Shayman recalls. "And then [we] finally pushed back, and they said, 'No we're not interested.'"
Luckily for the university, Shayman convinced the chair of internal medicine and his nephrology division chief to each kick in $10,000 to pay the patent fee. "It was probably the best investment the department ever made," says Shayman, who occasionally reminds today's tech transfer staff how their predecessors nearly cost the university a golden opportunity. "I have nothing but good things to say about the tech transfer office under the current leadership," he adds.
After demonstrating that Cerdelga worked in mice, Shayman contacted several biotech and pharmaceutical companies, including Genzyme, to take Cerdelga into clinical trials for human use. Genzyme didn't respond. Later, through a contact, he got a chance to present his work at the biotech company. After his lecture, Shayman says, Genzyme's research head stood up and said, "This is our unanimous opinion about your work: We see absolutely no prospect for this effort being successful."
But six months later, the same Genzyme administrator called Shayman at 4 p.m. and offered to fly him to the company's Massachusetts headquarters the next day. Genzyme's stock had plunged 30 percent that day following a report that another company was developing a substrate reduction drug for Gaucher disease. That threatened Genzyme's enzyme-replacement drug for Gaucher, Cerezyme, which accounted for two-thirds of its revenue. "That's when they became interested," says Shayman.
Journey To Market
In 2000, Genzyme licensed the Radin/Shayman patents from the U-M. But the competitive threat from the rival substrate drug turned out to be less serious than it seemed; though it was approved by the FDA, it has severe side effects and so is rarely prescribed.
To Shayman's disappointment, Genzyme took fourteen years to bring Cerdelga to market. He suspects that some company leaders weren't fully committed to developing a drug that would compete with Cerezyme. Shayman was also frustrated that Genzyme did not test Cerdelga in another lysosomal storage disease, Fabry disease, despite success in animals. (Genzyme sells an enzyme replacement drug for Fabry disease, too.)
Shayman's other big disappointment is Cerdelga's price. The twice-a-day pill is a chemical and so presumably much cheaper to manufacture than Cerezyme, which is produced by living cells. Shayman expected the cost of treating Gaucher disease would fall by half when Cerdelga hit the market. Instead, Genzyme priced it at $310,000 a year — even higher than Cerezyme.
Although that meant bigger royalties for the U-M and Shayman himself, he says he was "surprised and disappointed" at the decision — he would have much preferred smaller royalties and a more affordable drug. He looks forward to the day, sometime in the next decade, when Cerdelga's patents expire and generic versions can be offered at a fraction of the current price. At that point, he hopes that Cerdelga will also be tested in Fabry disease — and in other diseases that involve abnormal lipid accumulation in cells, including diabetes, polycystic kidney disease, and even certain cancers.
In the meantime, Shayman's lab is making and testing new variants of Cerdelga capable of penetrating the brain. These could work in several other lysosomal storage diseases, including Tay-Sachs, that involve brain cells. Shayman has grant support from the National Institutes of Health, but even without it the effort should continue, because the Cerdelga royalties provide a $10 million endowment for the lab. This time Shayman may form his own company to take the drugs forward.
The Cerdelga royalties also funded seven endowed professorships at the medical school as well as clinical trial support services there. Tech transfer receives a seven percent share, which has been funding new patent applications, says Pilz — an ironic outcome, given the office's initial refusal to file the Radin/Shayman patents. Radin didn't live to see any royalties — but Shayman says Radin, before he died, had the satisfaction of knowing that Cerdelga worked. And several companies are now pursuing substrate reduction to treat a variety of diseases. "It's a real testament to his scientific insights and genius," says Shayman.
Shayman, now sixty-three, has no plans to retire. "I'm having too much fun," he says. All along the Cerdelga journey, Shayman considered the knowledge gained worth the trouble, even if the drug never reached market. But it succeeded against all odds, and is now helping more than a thousand Gaucher patients, a number that is steadily growing.
While bettering their lives is gratifying, what has always motivated Shayman is simple wonder at how nature works. Scientists "derive satisfaction from making new discoveries," he says. "There's a period of time when you know something that no one else in the world knows."
Originally published in the December, 2017 issue of The Ann Arbor Observer. Republished with permission.