Nanocore Biotecnologia
State bank invests US$ 1.5 million in company that will launch
anticancer drug by 2009; history is marked by PIPE’s projects

Janaína Simões

Obtaining resources for R&D while providing services in order to generate its own income readily – such was the strategy Nanocore adopted in order to grow from out of an incubated business and have as partner a branch of the Banco Nacional de Desenvolvimento Econômico e Social (Brazilian Development Bank, BNDES), BNDESPar. About to close the deal with the bank, Nanocore is preparing itself to launch in 2009 its first innovative product: a recombined DNA immunotherapic for cancer treatment. Nanocore develops products and provides services of analyses and tests in the pharmaceutical, veterinary and biotechnological areas. The company’s executive director, José Maciel Rodrigues Júnior, gives no details — the patent request for the technology behind the medicine hasn’t been deposited yet at the National Institute of Intellectual Property (Instituto Nacional da Propriedade Industrial, Inpi). But he already celebrates the US$ 1.5 million Nanocore is going to get from the State bank. "We’re going to upgrade from nano to micro-businessmen,” he jokes.

Recombined DNA immunotherapics, also known as genic vaccines, have been the target of research in several countries and is a hope especially for cancer treatments. Traditional vaccines are developed from viruses or bacteria that cause the disease, which are used in their attenuated or inactive form – therefore with no pathogenic activity. When introduced in the human body, the vaccine induces the immunological system to produce antibodies that fight the disease. DNA immunotherapics are developed from a fragment of the micro-organism that is going to unchain in the body the immunological system’s protective response against the disease. In the case of the treatment Nanocore has been researching, the patient doesn’t get the vaccine proper, but instead the message for its production, and the DNA itself begins to produce the vaccine in the organism.

The production of the immunotherapic starts with the identification of a protein from the micro-organism that causes the disease or tumor. That protein, called antigen, induces the human immunological system to generate a protection response. By using the technique of genetic sequencing, the researchers look for a gene that codifies such protein. The gene is cloned, in order to multiply the number of copies that will be used in the vaccine, and purified. Then the gene is placed in micro-spheres, which Nanocore manufactures using nano and microtechnology.
The product is currently in the pre-clinical phase of development, that is, it’s still going to be tested in animals. "We must show efficiency and safety. Then we’ll have to demonstrate the product’s industrial and commercial viability, so that we can start tests in human beings," says Maciel. The company expects to complete the full cycle in Brazil.

The company’s portfolio

Founded in 2003, Nanocore develops pharmaceutical products using biotechnology and nanotechnology and analytical methodologies; in addition, it performs quality control tests of medicines, including for veterinary use. It has permission to develop formulas for medicines, and conducts complex chemical-physical tests for quality control, carries out viability surveys of products and has the capacity for developing culture processes of bacterial cells, yeasts and cells of mammals in various scales, used in the production of bio-molecules — protein or DNA —, among other services. The company doesn’t disclose its total revenues. BNDESPar’s societary participation is still being discussed, says Rodrigues Júnior. In other companies in which the bank has invested, such as the biotechnology company Genoa, BNDESPar kept 20% of the shares.

Nanocore has 16 employees. Six have PhDs. In addition, there are pharmacists, biologists and three mid-level technicians. There are also collaborations with the University of São Paulo (Universidade de São Paulo, USP), São Paulo and Ribeirão Preto campi, and with The Federal University of Minas Gerais (Universidade Federal de Minas Gerais, UFMG). The company is structured into three divisions, each of them coordinated by a PhD: Rodrigues Júnior, who has a degree in Pharmacy from UFMG, a Master’s in control of quality from the Federal University of Rio Grande do Sul (Universidade Federal do Rio Grande do Sul, UFRGS) and a PhD in pharmaceutical technology from the University of Paris XI, France, is in charge of the New Technologies Development Division; the Analytical Development Division is headed by Rodrigues Júnior’s partner at Nanocore, pharmacist Karla de Melo Lima, who also got her undergraduate degree at UFMG, has a Master’s in Pharmaceutical Sciences from the same institution and a PhD in Immunology from the USP’s School of Medicine at Ribeirão Preto; and Sandra Aparecida dos Santos, who has a degree in Biomedicine from the São Paulo State University (Universidade Estadual Paulista, Unesp), and has a Master’s and a PhD in Immunology from USP’s School of Medicine at Ribeirão Preto, coordinates the Biotechnology Division.

The company has two patent requests deposited at the Instituto Nacional de Propriedade Intelectual (National Institute of Intellectual Property, Inpi); for one of them it has also made an international deposit through the Patent Cooperation Treaty (PCT). A third request is about to be deposited. It’s the one about the immunotherapic for cancer.

Nanocore’s researchers also publish articles in Brazilian and international journals. "Once the patent is requested, the next step is to look for partners. Publication is a way to spread out the word about our work, but we preserve what hasn’t been protected by avoiding disclosing too much information", explains Rodrigues Júnior. "Publishing is important because when we have a meeting with R&D sectors of international companies they always have a list of our publications and question us about the articles", he completes. Something rare among Brazilian companies, Nanocore’s homepage on the internet lists its scientists’ 30 publications, four of them book chapters – the others are texts in journals such as the Annual Review of Biomedical Science, the Gene Therapy and the International Journal for Parasitology.

US$ 1 million from Fapesp

Nanocore has already gotten five loans from the State of São Paulo Research Foundation (Fundação de Amparo à Pesquisa do Estado de São Paulo, Fapesp) within the Programa Inovação Tecnológica em Pequenas Empresas (Technological Innovation in Small Businesses Program, PIPE). All of the research projects were based on recombining technologies for the production of recombined proteins and DNA for various applications in the areas of medicine, vaccines and diagnostic methods development.

The first PIPE to be approved was a project for the production of recombined DNA focused on a vaccine for tuberculosis. "That project provided us the capacity to produce recombined DNA, which is the project on which BNDES is betting. We got good results in terms of efficiency in animals, but we never tested it in humans," recalls Rodrigues Júnior. The company is no longer focused on that project, and has turned to the area of immunotherapics, which has better market potential. But the knowledge the project generated is the object of one of the two patents Nanocore has. It refers to the association of recombined DNA with microparticles targeted to single dose vaccines or immunotherapics. "It’s a technological platform that we can use in different applications, in vaccines for animals and immunotherapics for human use," he adds.

The second PIPE project was directed to the production of recombined follicle-stimulating hormone (FSH), and is being carried out in partnership with Professor Mari Sogayar, of USP’s Institute of Chemistry (Instituto de Química). "We’ve begun the clinical studies in animals, and in 2008 we expect to start with humans, as soon as we have the manufacturing plant certified," says Rodrigues Júnior.

The third PIPE project refers to a vaccine against ticks. "It’s a single dose vaccine, different from the proteins that are in the market," he comments. In partnership with Embrapa Gado e Corte – the subsidiary of the Brazilian Agricultural Research Foundation directed to livestock raising – in the State of Mato Grosso do Sul, Nanocore characterized the stocks with most incidence in Brazil, which were cloned. The medicines against ticks currently in use in Brazil must be taken in several doses and are designed for stocks that don’t exist here.

The fourth PIPE project, a partnership with the School of Medicine of USP at Ribeirão Preto, studies methods for the diagnosis of hantavirosis. "It’s a disease with high lethality; there are patients who die without having the diagnostic," Rodrigues Júnior points out. Nanocore has proposed a quick method for the diagnosis. A company from the State of Rio Grande do Sul is supposed to commercialize the kit.

The latest PIPE project, which was approved recently, will also be carried out in partnership with USP’s Institute of Chemistry. The project is aimed at the production of amylin analogues – amylin is a substance secreted by the same glands that produce insulin in the pancreas and helps treating diabetes. In total, Fapesp has invested some US$ 1 million in Nanocore, according to Rodrigues Júnior. The company also had fellows from the Conselho Nacional de Desenvolvimento Científico e Tecnológico (National Council for Scientific and Technological Development, CNPq) working for it and got a small loan from Brazil’s main State bank, Banco do Brasil. But in order to leave the incubator, the Ribeirão Preto’s Supera, what really helped were the company’s own resources.

The company’s origin

Nanocore was born out of a research project of UFMG and USP aimed at producing recombined vaccines. In 2003 the company came to Supera, where it remained for 25 months. One year and two months ago, already graduated, it moved to the city of Campinas. Although the State capital, Belo Horizonte, is a biotechnology center, there was a limitation there in terms of fostering that kind of activity in Minas Gerais. The researchers-entrepreneurs chose the State of São Paulo because of the opportunity Fapesp offered through PIPE. Also important for the decision were the good relationship with the School of Medicine of USP-Ribeirão Preto and the initiative of the university and the city government to create Supera. Rodrigues Júnior left his post as UFMG professor to set up the company.

When Nanocore graduated from the incubator, he chose the Techno Park, a condominium of businesses near Campinas, for the company’s headquarters and labs. He considered the costs reasonable and took into account the proximity to the market. "We are close to the pharmaceutics companies, located in the Campinas-São Paulo axis. In Ribeirão Preto we had two customers; now, in Campinas, we have 25," says Rodrigues Júnior. Among them international partners such as Schering-Plough and Merial. "We develop veterinary products for those two companies. They were initially directed to the domestic market, but one of them has global interest and should be exported", he tells. The product’s names are being registered.

The company also became interested in the Campinas city government’s program to attract investments to the municipality. Campinas offers tax breaks to technology companies. "They were crucial for our decision to come", he admits.

Services: the solution for generating income

"Because of the development of those PIPE projects the company had to set up a bio-analysis lab, and that gave us the opportunity to offer services of analytical development and development of pharmaceutical products while we were still in the incubator," recalls Rodrigues Júnior. With the revenues from the services it provided Nanocore hired personnel and built its headquarters. "The big limitation we had was access to credit. That’s why we opted for strengthening the area of services, in which we were successful," he says. "The contact with our clients always brings an additional development." When Nanocore finds a problem in the quality control of a medicine, an opportunity for maximizing or adding a new technology opens up.

The company is headquartered in a 2-story building built in a 400-sq. meter (4,305 sq. ft) area inside the Techno Park. In it are installed five laboratories. One of them, the one for bio-analyses, concentrates the activities of services. For example, the company may conduct there the analysis of the stability of the medicines, which defines its lifetime. To do that Nanocore simulates in the laboratory different temperature and humidity conditions, to which the medicine is submitted. With that, it is possible to determine the period in which the medicine maintains its active principle’s characteristics and content.

At the development laboratory the company may reach the stage of manufacturing pilot lots of a new medicine. "In the case of medicines for human use we make partnerships for both the pre-clinical and the clinical phases," he says. For the pre-clinical phase, in which are carried out tests with animals, the partnership is with Minas Gerais’ Bio Horizonte — whose owners are the same as Nanocore’s —, which takes charge of tests in birds, bovines, swine and caprines.

The Microbiology/Fermentation Laboratory is equipped for conducting microbiological analyses, especially for the detection of the potency of antibiotics. "We work with small volumes until the pilot scale is reached," explains Rodrigues Júnior. At the Laboratory for Purifying Proteins the company has the capacity to process as much as a few grams of proteins – a gram, in terms of proteins, is an expressive mass. Last but not least, Nanocore has a Laboratory for Cell Cultivation, since it uses transformed cells to produce proteins. "This lab is going to get a big upgrade in the next structure because it’s very important for us." Nanocore is about to move: it’s going to take an 800-sq. meter (8,610 sq. Ft) building, twice the space it has today. The new headquarters, also within Techno Park, is almost finished and is located across from two other knowledge-based companies, CanaVialis and Alellyx.

Reasons for success

Norberto Prestes, manager of the Supera incubator, highlights the factors that have made Nanocore’ a success. First, the company filled a gap in the market by offering tests and researching immunotherapics. Belonging to the area of nanotechnology also helped, because that’s one of the sectors that Brazil’s current industrial policy emphasizes. In addition, the company was able to solve the problem of its sustainability in the short run by investing on services in order to generate income and survive after leaving the incubator. "The public sector invested in Nanocore because it has a project that, if successful, will bring high returns," he adds.

Prestes points out that incubation of technology companies is a risky business and that Nanocore’s success story unfortunately is still an exception among incubated enterprises. "Incubators exist as public instruments to induce economic development, and one of their goals is to provide infra-structure to companies so that they focus their efforts on innovation and take more risks," he explains. One of the most common problems in incubated companies, he says, is the researcher-entrepreneur developing an “obsession for the final product", which can take a long time to be ready. Thinking only about that, he fails to create a strategy to survive in the meantime.

"Nanocore’s executives realized that their product would take a while to reach the market and that they would have to find ways to keep the company going until that happened. In order to do that they maximized knowledge, the physical structure and the personnel to operate in a niche that provides them knowledge for the development of their product and generates income," he analyzes. Nanocore’s experience has become a sort of model for Prestes: the incubator advises its researchers-entrepreneurs to think about alternatives for the company’s survival in the mid and long run as well.

Industrial policy, Innovation Law...

Rodrigues Júnior highlights the fact that the participation of BNDESPar in the company is directly related to the government’s industrial policy, which sets biotechnology and nanotechnology as priorities. He also approves an instrument created by the Innovation Law called economic subvention. Nanocore has had a request approved and should get subvention from the Financiadora de Estudos e Projetos (Brazilian Innovation Agency/Research and Projects Financing, Finep) to hire holders of Master’s Degrees and PhDs. "But it’s important that we have a profile of service suppliers because the cash flow reduces the anxiety for the funding, and that makes possible for us to work with the government slower timetables," he points out.

Rodrigues Júnior tried to start a business before Nanocore. He says that he failed because back then USP did not give permission for the use of the patent of the researcher that would be one of the company’s partners. Now, with the Innovation Law, he sees a more positive attitude on the part of universities, but warns that there are still no clear rules as to how intellectual property will be managed in those institutions.

The company also resents the lack of return from the Comissão Técnica Nacional de Biossegurança (National Technical Commission of Bio-Security, CTNBio), the organ in charge of regulating the sector in Brazil. Nanocore has an internal bio-security commission and prepares annual reports, as the law determines, but there’s no return from CTNBio. "We’re very careful with Brazilian and international norms. There were times when we’ve had doubts as to if it was the National Sanitary Surveillance Agency [Agência Nacional de Vigilância Sanitária, Anvisa] that should give the license in the case of recombining technologies, but that hasn’t affected us very much because we still don’t work with production. But that’s what we’re going to face now though", he adds.

Intellectual property

According to Rodrigues Júnior, Nanocore adopts a flexible posture in intellectual property when it is hired for R&D projects. "The patent may belong 100% to the owner, or we may share it", he says. Besides, Nanocore agrees in sharing the risk when it is hired to develop a product – it accepts a future remuneration in the form of royalties.