(l-r) Moise Khayrallah, Ph.D., CEO; Amy O’Connell, clinical data manger; Yuki Prescott, clinical trials manager; Gary Bream, Ph.D., senior director, Scientific Affairs; Kelly Abernathy, manager, Clinical Affairs; and Dawn Talley, office manager.
By Jim Shamp, News & Publications Editor
Moise Khayrallah isn’t an author. But he and his colleagues are putting together a spellbinding success story that reflects North Carolina’s larger-than-life small-business biotechnology legacy.
Khayrallah is cofounder and chief executive officer of Durham-based Addrenex Pharmaceuticals. He and Charlotte physician Joseph Horacek started the company in 2006 with the help of $160,000 in loans from the Biotechnology Center. Established as a fast-track “virtual” drug development company to minimize overhead and maximize efficiency in its pipeline, the privately held startup outsources manufacturing and preclinical work, but keeps the management of the clinical programs in house.
Until this month it’s only been a four-person company, working with more than 100 contract clinical researchers and various other consultants and contract support. Like the conductor of a musical ensemble, Khayrallah keeps everyone on the same page.
And the model has worked. Addrenex already has two drugs in its pipeline – Clonicel for attention deficit/hyperactivity disorder (ADHD) and CloniBID for hypertension. A new drug application has already been filed for CloniBID, with Food and Drug Administration review expected by mid-December, and Clonicel is in phase 3 clinical trials.
Now the Addrenex staff is doubling. Three new key people joined the firm this month, and another is to be announced next week. The additions of Steven Butts, MBA, as vice president of commercial operations and Gary Bream, Ph.D., as senior director of scientific affairs, will strengthen Addrenex’s ability to pursue more new drugs targeting conditions such as menopausal flushing, pain, addiction, aggression and post traumatic stress disorder, said Khayrallah. And he added that Yuki Prescott has joined as clinical trials manager and will enhance the firm’s ability to oversee its growing clinical program.
Last July Atlanta-based Sciele Pharma bought a $6 million equity stake in Addrenex – and the right to increase that share by 10 percent. Sciele also agreed in that deal to make regulatory milestone payments of up to $11 million, and royalty payments to Addrenex on product sales, for an experimental treatment for attention deficit and hyperactivity disorder.
And recently Khayrallah announced the firm’s second major drug-development deal with Sciele, potentially putting $27 million more into the Addrenex coffers. The firms will co-develop a drug that could target both hypertension and menopausal flushing, with Sciele picking up the tab for development plus royalties if it's approved by the U.S. Food and Drug Administration.
"I have to say, the North Carolina Biotechnology Center has been tremendously valuable to us,” Khayrallah said. “Without the two loans we received from the Center, we wouldn’t have been able to finish manufacturing our original compound and get it into clinical trials."
“And the Biotech Center library is a fantastic resource. We rely very heavily on the Biotechnology Center librarians to connect us with sources of market research, tell us what’s going on, things like that. And finally, of course, there’s the networking potential from the likes of John Richert and his Business and Technology group," Khayrallah said. "John’s always sending me e-mails about somebody wanting to talk to me, somebody with an idea, making it possible for us to attend useful functions."
“I think a lot of people are not aware of the valuable resource we have here in the Biotechnology Center. There was a similar center in Seattle, but it was nowhere near as active – and especially not as focused on pharmaceutical biotech as this one in North Carolina.”
Khayrallah came to the University of North Carolina at Chapel Hill from his native Lebanon in 1983, a week after his marriage. He earned a Ph.D. and his wife completed graduate studies in social work. The couple loved North Carolina so much they decided to call the Triangle home.
Khayrallah joined Burroughs Welcome (BW) in 1987, specializing in clinical research and statistics. He left the large pharmaceutical world in 1996, a year after the BW merger with Glaxo, joining BW colleague Charles Lineberry in helping to form Lineberry Research Associates (now Constella Group). It was Khayrallah’s first taste of entrepreneurship, and he quickly became a connoisseur of the low-fat, high-energy world of biotech start-ups.
Less than four years later, Khayrallah’s growing addiction to the small-company concept led him to Cytran, a small biotech company in Seattle. But before long he was drawn back to North Carolina. “I was looking for opportunities like Addrenex,” he recalls with a chuckle. “My partner, Joe Horacek, was working with kids with ADHD and we shared an interest in exploring better ways of handling it.”
And this is just the beginning. Addrenex has lots of work ahead, said Khayrallah. The company has licensed an entire library of 400 adrenaline-related adrenergic compounds donated to the University of Nebraska by Procter & Gamble. “These are compounds that hadn’t found their way to North Carolina previously, and they’re letting us stay with our core objective, to figure out how to fight some of the medical conditions affected by this adrenergic system.”
So far Khayrallah doesn’t see the need for Addrenex to go public. “We’re hoping to remain private as long as possible,” he said. “But we’re also realistic about the usual path for young companies like ours. We have all options on the table, but we’re working hard to see if it will be possible for this young company to be independent and still be profitable and viable. We’re doing everything we can to work toward that.”
And Khayrallah credits support from the Biotechnology Center for helping it speed safely down its fast track.
“The North Carolina Biotechnology Center has been tremendously instrumental in helping us achieve what we’ve achieved,” he said. “And I think it’s becoming more known. You’re not sitting on sidelines – you’re in the thick of it.”