Merck Encycles through Canada

By Michael J. Haas, Associate Editor

Published on Thursday, December 4, 2014

The first disclosed grant under Merck & Co. Inc.‘s Canadian translational initiative will bolster the ability of macrocycle-based Encycle Therapeutics Inc. to conduct lead optimization of its integrin α4b7 inhibitors for inflammatory bowel disease.

Last year, Merck launched the initiative with a C$4 million ($3.5 million) fund to support-and give a first look at-research from early stage companies and academic institutes across the country.

The announced deal will help finance a joint team from Encycle and the Institute for Research in Immunology and Cancer (IRIC) to perform medicinal chemistry and preclinical efficacy studies. IRIC is a translational unit housed at the University of Montreal.

Encycle is a spinout from the University of Toronto founded in 2012 to solve the primary challenges of macrocycle drugs-poor cell penetration and low oral availability.1,2

According to Parimal Nathwani, the company was selected by MaRS Innovation and IRICoR (Institute for Research in Immunology and Cancer-Commercialization of Research), two of the three agencies originally tasked with disbursement and management of the Merck fund, because it was a good match with IRIC’s competencies. The third agency, The Centre for Drug Research and Development, is not involved in this deal. IRICoR is the commercialization arm of IRIC.

“Encycle has a good chemistry platform and nice early discovery work on its integrin a4b7 inhibitor program, which is now at the point where it needs to move through lead optimization,” said Nathwani. “IRIC scientists have strong expertise in medicinal chemistry and have worked with industry on optimization, pharmacokinetics, toxicity and other preclinical studies, so they can provide Encycle with pharma-grade optimization.”

Nathwani is VP of life sciences at MaRS Innovation, a translational center that commercializes discoveries from 16 academic institutions and hospitals in Ontario, including the University of Toronto.

Encycle president and CEO Jeffrey Coull told SciBX, “We initiated lead optimization of our integrin a4b7 inhibitors a few months ago and so far have identified some compounds with good potency and membrane permeability to demonstrate that our program has strong potential.”

He said that the funds from Merck-combined with an equal financial contribution from Encycle-will allow his company to create “an integrated optimization team” that will conduct additional medicinal chemistry and in vivo studies.

He added, “For us, it’s all about bandwidth. IRIC adds to the expertise we already have in-house and will accelerate our efforts and get us across the finish line with a lead development candidate.”

MaRS Innovation and IRICoR will manage the Merck funds for the joint Encycle-IRIC research team. Nathwani declined to disclose how much money the Encycle project will receive but said the deal gives IRICoR an equity stake in Encycle and increases MaRS Innovation’s existing stake.

Macrocircular arguments

Encycle’s macrocycle platform includes three features not found together in other macrocycle platforms: a lack of sulfur to enhance metabolic stability; inclusion of several intramolecular hydrogen bonds that alter the molecules’ folding and increase their ability to permeate cell membranes; and an upper size limit of three to five amino acids, which gives the molecules better oral availability than larger rings typically achieve.3

According to Coull, this combination of features gives the molecules-which Encycle has dubbed ‘nacellins’, a reference to their boat (nacelle)-like conformation-longer in vivo half-lives than sulfur-containing macrocycles and greater cell penetration than macrocycles that have fewer intramolecular hydrogen-bonding motifs.

The most advanced macrocycle in development is Polyphor Ltd.‘s POL6326, a conformationally constrained peptide that antagonizes CXC chemokine receptor 4 (CXCR4; NPY3R). The compound is in Phase II testing to treat multiple myeloma (MM) using autologous transplantation of hematopoietic stem cells. At least seven other companies have macrocycles or conformationally restrained peptides or peptidomimetics in development to treat a range of diseases.

Encycle’s lead nacellin program inhibits integrin a4b7, a protein expressed by lymphocytes that binds mucosal vascular addressin cell adhesion molecule 1 (MAdCAM-1) on endothelial cells. The interaction drives proinflammatory cells to leave the circulation for the gut, which contributes to the chronic inflammation in IBD.

This fall, Encycle’s collaborators at Roswell Park Cancer Institute completed studies of one of the anti-integrin a4b7nacellins, ET-377, in a mouse model of colitis that tested the ability of the compound to block movement of lymphocytes out of the plasma.

“We got some very interesting data from the study and saw good efficacy for the compound” in this model, Coull toldSciBX. He said that ET-377 produced results in the model comparable to those for two antibodies-an anti-mouse integrin a4b7 mAb and an anti-mouse Madcam-1 mAb-when it was run in a head-to-head comparison.

In its second nacellin program, Encycle is using its macrocycle technology to tackle hard-to-reach proteins involved in ubiquitination.

“Pharma has been going after E3 ubiquitin ligases for years without success,” Coull said, “but it’s been a tough nut to crack because the protein-protein interactions involved are intracellular. We thought we could make a nacellin large enough to interrupt SMURF’s interactions with other proteins but small enough to get inside the cell.”

SMAD specific E3 ubiquitin protein ligase 1 (SMURF1) and SMURF2-targets of Encycle’s program-are important regulators in the focal adhesion dynamics in cancer and fibrosis.

Coull said that Encycle has made active cell-permeable inhibitors of SMURF1 and SMURF2. Because good membrane permeability is an important advantage for nacellins, Encycle collaborated with a biochemist from the University of Toronto to develop an algorithm for predicting membrane permeability. Coull said that the algorithm uses seven different physical properties of nacellins.

“The algorithm gives us a global understanding of how nacellins get through cell membranes and bind their targets, and we are actively employing it in lead optimization for both of our programs,” he told SciBX.

Encycle has also completed a project funded by CQDM to generate a target-agnostic library of 1,500 nacellins. Each of the four pharma partners involved in the project-AstraZeneca plc, GlaxoSmithKline plc, Merck and Pfizer Inc.-has the right to screen the library against two targets of its choice. Coull expects the screenings to begin in about a month.

CQDM, formerly the Quebec Consortium for Drug Discovery, receives funding from the federal and provincial governments, eight pharma sponsors and other partners to support the development of precompetitive research tools and technologies.

Encycle has raised C$2.5 million ($2.2 million) in seed funding, most of which comes from MaRS Innovation. The company is also raising C$10-15 million ($8.8-13.1 million) in a series A round to fund the integrin a4b7 program through Phase II trials. Encycle expects to close the round in 1H15.

Nathwani said that MaRS Innovation is putting together two other medicinal chemistry programs with IRICoR that would be funded by the Merck grant and expects to announce those programs in 1Q15.

Steven Klein, IRICoR’s VP of business development, told SciBX that funds from the Merck initiative have also gone to two other projects that are jointly managed by IRICoR and the Centre for Drug Research and Development, but the details of those projects are undisclosed.

Haas, M.J. SciBX 7(46); doi:10.1038/scibx.2014.1338
Published online Dec. 4, 2014


1.   Kotz, J. SciBX 5(45); doi:10.1038/scibx.2012.1176

2.   Cain, C. BioCentury 20(38) A7-A13 (2012); Sept. 17, 2012

3.   Haas, M.J. BioCentury 13; Aug. 4, 2014


AstraZeneca plc (LSE:AZN; NYSE:AZN), London, U.K.

The Centre for Drug Research and Development, Vancouver, British Columbia, Canada

CQDM, Montreal, Quebec, Canada

Encycle Therapeutics Inc., Toronto, Ontario, Canada

GlaxoSmithKline plc (LSE:GSK; NYSE:GSK), London, U.K.

IInstitute for Research in Immunology and Cancer Montreal, Quebec, Canada

Institute for Research in Immunology and Cancer-Commercialization of Research, Montreal, Quebec, Canada

MaRS Innovation, Toronto, Ontario, Canada

Merck & Co. Inc. (NYSE:MRK), Whitehouse Station, N.J.

Pfizer Inc. (NYSE:PFE), New York, N.Y.

Polyphor Ltd., Allschwil, Switzerland

Roswell Park Cancer Institute, Buffalo, N.Y.

University of Montreal, Montreal, Quebec, Canada

University of Toronto, Toronto, Ontario, Canada

04 December 2014


President and CEO

Dr. Jeffrey Coull has served as Encycle’s President and CEO since 2013. He is also an Adjunct Professor at the University of Toronto. Prior to joining Encycle, Jeff co-founded Chlorion Pharma, a venture-backed drug discovery company focused on neuropathic pain and epilepsy, and KineRx Neurosciences, a specialty pharmaceutical company that acquired the rights to a marketed movement disorder therapeutic. He holds a PhD in pharmacology from McGill University, and, upon convocation, received a Doctoral Prize from the Natural Sciences and Engineering Research Council of Canada, the countries highest distinction for doctoral research.

Andrei Yudin, PhD

President and CEO

Dr. Andrei Yudin founded Encycle in 2012 to apply and commercialize the proprietary synthetic methods he and his colleagues invented. He is a Professor in the Department of Chemistry at the University of Toronto, a Fellow of the Royal Society of Canada, and currently serves as Chair of the Board for Organic and Biomolecular Chemistry. Andrei has also received several major awards, including the 2010 Rutherford Medal and the 2015 Bernard Belleau Award in Medicinal Chemistry. He holds a PhD in chemistry from the University of Southern California, where he worked under the direction of Nobel Laureate Professor George A. Olah, and served as a postdoctoral fellow in the laboratory of Nobel Laureate Professor K. Barry Sharpless at the Scripps Research Institute.

Raphael Hofstein, PhD

President and CEO

Dr. Raphael Hofstein is Chairman of the Board at Encycle and serves as President and CEO at MaRS Innovation, which, along with Professor Yudin, was instrumental in the formation and seeding of Encycle Therapeutics in 2012. Rafi also serves on several other boards, including TriPhase Accelerator Corporation, Life Sciences Ontario and Quebec Consortium for Drug Discovery. Prior to taking the helm at MaRS Innovation, he held various senior roles at Ecogen in Langhorne, PA and in Israel, and was President and CEO of Hadasit, the commercialization company of Hadassah, the largest teaching hospital in Israel, among other positions in the life sciences. Rafi received his PhD in Life Sciences and Chemistry from the Weizmann Institute of Science.

Andrew Roughton, PhD

Vice President, Discovery and Operations, Encycle Therapeutics

Dr. Andrew Roughton is Encycle’s Vice President of Discovery and Operations and was the company’s first full-time employee. Before joining Encycle, he was a Senior Medicinal Chemist at Dalton Medicinal Chemistry, and previously, spent nearly 15 years as a Senior Principal Scientist at Pharmacopeia in Princeton, NJ. During this time Andrew was also a founding member and secretary of the NJ Biotechnology Chemistry Consortium. He completed his PhD in organic chemistry at the Max-Planck-Institut (Mūlheim a.d. Ruhr / Universität Essen) under Professors Martin Demuth and Kurt Schaffner, and a post-doctoral fellowship at Eidgenössische Technische Hochschule Zurich (ETH), where he focused on bioorganic chemistry under the guidance of Professor Steven Benner.