The formulation for success…
Profile XstalBioCore business: Drug delivery of biological molecules
Date incorporated: August 2001
Annual revenues: About £600,000
Number of employees: 12
Major customers: Top 20 pharmaceutical companies, including vaccine and biotech companies
The formulation for success
It may seem odd that XstalBio does not name its clients on its website, but its CEO and founder, Marie Claire Parker, explains: “We help provide formulation solutions for many of the world's leading pharmaceutical companies. Our clients and the projects that we work on are confidential and this is primarily because if our technology provides an 'edge', solves a technical problem or is potentially game-changing, then it’s logical to limit what other companies know. Although we can’t say who we work with, which would be good for our business, the flip-side is that we have developed a number of long-term relationships with some clients and as their challenges have changed, we’ve been responsive to this and this has helped us to innovate.”
Founded in 2001, XstalBio focuses on “advanced drug delivery,” developing solutions that enable bio-pharmaceuticals to get inside the body as efficiently as possible – an area that can be overlooked in the initial stages by many companies developing new therapeutic proteins, vaccines and peptides. According to Parker, some drugs can lose more than half of their potency during their journey from laboratory to body, and this not only adds to costs but makes them less reliable. The reason, she explains, is that biomolecules are large, complex three-dimensional structures which can be very sensitive to their environment. “Our job,” she says, “is to get them into the body in the right dose in an easily-delivered stable form, effectively and safely. The challenge set by clients may be different every time, but nine times out of ten, our technology solves it.”
The technologyThe technology that led to XstalBio being founded was jointly developed by researchers at the University of Glasgow and the University of Strathclyde in the late 1990s and was patented by Parker and her colleagues, Johann Partridge, Barry Moore and Peter Halling.
The protein-coated microcrystal system (PCMC) was a breakthrough that enabled protein-based drugs to be delivered by inhaler instead of by injection, and serendipity was almost as important as the science involved. As Parker describes it, quoting science fiction writer Isaac Asimov, “The most exciting phrase to hear in science and the one that heralds most discoveries is not Eureka! but that’s funny.”
The “funny” thing that happened was that Parker and her colleagues were expecting to prepare an amorphous mix of particles (formulating enzymes for biocatalysis with different common salts) when they discovered that the particles were in fact not amorphous but crystalline and had unique properties – a water-soluble, crystalline core (amino acid, sugar or salt) which provided an efficient form of transport for bioactive molecules, enabling them to be prepared in a dry powder format for delivery via inhaler in the appropriate particle-size range. Solving these technical challenges not only kept the drug stable but also made it easy to control the dose and the release rate, combining several different protein nanoclusters on the same surface.
Different versions of PCMC are developed for specific pharmaceuticals – for example, proteins such as insulin. XstalBio’s PCMC system is also very effective for treating diseases such as cystic fibrosis, because it can be delivered as a dry powder straight to the lungs.
The companyXstalBio was one of the first companies in Scotland to spin out from two universities (Strathclyde and Glasgow), but Parker and her colleagues needed more than good science to get it established, setting up their operation in the Centre for Integrated Diagnostic Systems (CDIS), a bio-incubator facility in the University of Glasgow. After the initial excitement of discovery, they had to validate the new technology and fund their research by working with a major harmaceutical company. At first, they also looked for venture capital (VC) investment, but this proved to be a distraction. “Many potential investors were very positive about the new echnology,” says Parker, “but they thought we were too early-stage and told us to come back when we’d signed our first licence agreement.” Several people also advised Parker to try and limit involvement from VC investors because “they seek returns over a timescale that often isn’t aligned with that of the life-science industry.”
In the pharmaceutical industry, product and technology timescales tend to be longer than in most other sectors. Even if the science is already proven, says Parker, negotiations with potential clients (over budgets and priorities, etc.) can in the most extreme cases go on for up to two years from the first point of contact “before you even lift a pipette.”
Because they believed in the science, Parker and her colleagues decided to go ahead anyway, and took three years, from 1999 to 2002, to prove the technology worked, working with the company’s first pharmaceutical partner, Boehringer Ingelheim in Germany. “It is rare in science to find new technology working so quickly,” says Parker, “but we met all our targets and we were all very keen to exploit it.” In 2004, she then secured the licence for PCMC, after reaching agreement with Strathclyde and Glasgow, and the client list steadily grew. “intellectual property (IP) is worthless if it sits on the shelf,” Parker says.
The CEO and founder has always refused to let barriers get in her way, combining scientific discipline with a talent for business and a passion for getting things done. “For some academics, the safe option is to do nothing, but I was fired up from the start,” she explains. Other scientists spin out too early, she cautions, but XstalBio managed to fund its research from the start on its earnings, primarily from Boehringer Ingelheim, supplemented by grants and awards, including several SMART: SCOTLAND awards, plus funds from private shareholders. “We aimed to grow organically,” says Parker.
From 2005 onwards, XstalBio started to build up a much broader client portfolio among the Top 20 pharmaceutical giants, along the way developing new PCMC solutions and building up its scientific data. In addition, in collaboration with Boehringer Ingelheim, PCMC can be manufactured for clinical batches of material under licence.
“You have to be proactive,” says Parker, “but you also have to realise that individual clients can be very different and have to be carefully managed. One size does not fit all.”
There are lots of companies who specialise in formulation, says Parker, but most of them are focusing on incremental problems rather than on the new “game-changing” solutions which XstalBio is developing in Glasgow today. The delivery of drugs by inhalation is only one aspect of the company’s work now and Parker’s team is looking to the future by focusing on methods to deliver very high concentrations of drugs – in a single shot – in doctors’ surgeries and even in the home, so patients do not need to go to hospital for treatments that can often take several hours. Although the underlying technology is still based on PCMC, the company is currently developing a much broader platform to meet more diverse therapeutic needs, at the same time as working with a wide range of clients.
So, what is the next step for XstalBio? In Parker’s view, the target is a trade sale within the next two or three years – a plan that has been in the back of her mind since the company started. This will mean becoming part of a large drug delivery company, or the drug delivery division of a large pharmaceutical firm.
“We’re determined to make it all happen,” says Parker. “Our success is based on constant innovation and listening to customers. We can’t be sure that what we develop today will be tomorrow’s new technology, but we have to embrace risk and never let anything get in our way.”
How can we encourage entrepreneurs?“Instead of focusing on students who are doing well, we should encourage students who are failing – because they will be the entrepreneurs of the future,” says XstalBio CEO and founder, Marie Claire Parker. “Students should be helped to find out what they're good at, and role models can also help to inspire, but real entrepreneurs often tend to be born out of hardship. Successful people seem to have a spark in them, while others complain and get nowhere, the difference being that they act on their ideas rather than bemoan circumstances around them that conspire for failure.”
In Parker’s view, it’s important to develop resilience – learn how to bounce back from failure. “Schools and universities should focus more on problem solving, rather than learning by rote, with open-book exams in many cases paving the way for a different, more rewarding form of learning for both pupil and teacher,” she explains.
According to Parker, many scientists are held back in business by the impossible quest for perfection. “New solutions don’t need to be perfect,” she says, “just good enough. Does it tick most of the boxes? Are some boxes less important than others? Is it innovative enough? Will it be useful and straightforward to implement? Will it integrate with clients’ existing solutions and be marketable, and is it better than what’s out there?”
Parker also thinks it’s important to get the right people around you to build up the business and considers she’s been very lucky so far, with a core management team of five people who work very well together, have complementary skills and benefit from a range of personal styles.