A Remarkable Chance

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By Deborah Komlos

Staying focused on completing and defending their thesis research is a strong enough preoccupation for most doctoral students. Imagine being struck during this critical and already anxious time by the realization that you could actually spring a new company from your science. Clarissa Desjardins, PhD was, and she grasped what she says was “an opportunity of a lifetime” with full-hearted resolve.

Acting on that realization would eventually lead to Caprion Pharmaceuticals Inc. (Montreal, QC), where Desjardins is executive vice-president of Corporate Development.

A proteomics-based drug-discovery firm, Caprion has a proprietary platform called CellCarta™ that quantitatively profiles the entire protein complement of organelles isolated from normal and diseased tissues, providing protein maps that can be used to identify drug targets. The firm has research programs in oncology, biomarker discovery, and has partnered products for bovine spongiform encephalopathy and variant Creutzfeldt-Jakob disease.

It was in 1992, at the age of 26 and only a few months away from defending her PhD at the Montreal Neurological Institute (MNI) of McGill University (Montreal, QC), that Desjardins and then-fellow graduate student Marie-Pierre Faure, PhD founded the precursor to Caprion: Advanced Bioconcept Ltd.

Opportunity Knocks
Desjardins says that she and Faure — now the CEO and co-founder of BioArtificial Gel Technologies Inc. (Montreal, QC) — had intended to develop fluorescent peptides as a tool to meet their own research needs.

“We used to use radioactive peptides to label cells and to do all kinds of tracing studies, which had to do with our thesis topics,” Desjardins says. “But any grad student will tell you they hate working with radioactivity. It’s not stable. It’s toxic. It’s just not fun to work with. And we very naively thought, let’s just replace the radioactivity with fluorescence. So it was a naive discovery.

“What got us excited is when we did a literature review, we saw that yes, some people had tried to make fluorescent peptides before, but each time, they lost the biological activity,” she says. “So it seems like we had fallen upon a trick to preserve the biological activity of the fluorescent peptides. And we thought, well, gee, if this tool is useful to us, it must be useful to all kinds of researchers all over the world.”

The “trick” was to be careful about which amino acid position to attach the fluorescence to. “Previous attempts had just labelled the peptide randomly, and of course when you do that, you lose the biological activity,” Desjardins explains. “If you’re careful about the site of fluorophore attachment so as not to inhibit the biological activity, it works.”

Faure developed the first fluorescent neurotensin product, and she and Desjardins decided to create a business based on their novel approach.

After shopping their business plan for nearly 18 months, they finally landed upon a series of private angel investors, Desjardins says. Some of these original backers are still investors in Caprion today, including Ronald Cape, PhD, chairman of the firm’s board.

During that scouting period, Desjardins did a post-doctoral fellowship at the Douglas Hospital Research Centre (Montreal, QC), and once the funding arrived, Desjardins and Faure worked for almost a year on their own, developing their fluorescent peptide products and filing patents. But a vital component was still lacking, Desjardins says.

“We realized from Day 1 that everybody had their expertise, and part of building a successful company was bringing in the management team,” Desjardins says. The team became a reality in 1996 when she was approached by an old colleague, Martin LeBlanc, who then brought Lloyd Segal into the picture; both had worked for the Montreal, Que. location of management consulting firm McKinsey & Co. (New York, NY). LeBlanc became VP of Sales and Marketing, Segal took the role of president and CEO, and Desjardins became VP of Business Development. Faure decided to pursue other research ideas, and left to create a new firm.

“After Martin and Lloyd joined, we started selling the product like crazy, we became a real biotech company in earnest,” Desjardins explains. “I think Marie-Pierre and I did a good job laying the foundations of patents and science applicability. But it was really time to start selling, and this is what Martin and Lloyd did incredibly well — so much so, that less than 18 months after they joined the company we got an offer to sell the company.”

‘Canadian Prion’ is Born
Advanced Bioconcept was bought in 1998 by NEN Life Science Products Inc. (now part of PerkinElmer Inc. of Wellesley, Mass.).

“All of our employees and founders et cetera got all of their sweat equity credited and the very next day we founded Caprion,” Desjardins says. “So we founded Caprion with a few of our employees from Advanced Bioconcept who were willing to take the leap.”

Caprion, named for “Canadian prion,” was established on the basis of early stage prion technologies that Dr. Neil Cashman was working on at the MNI. The firm then made a licensing deal with Idexx Laboratories Inc. (Westbrook, ME) in 1999, and also had a financing round with Ventures West Management Inc. (Vancouver, BC), which Desjardins says remains Caprion’s only venture capital investor.

In 2000, Caprion raised $52.5 million through a financing led by Ventures West and Boston, Mass.-based Fidelity Management & Research Co., and this was, at the time, the largest-ever financing for a private Canadian biotechnology firm, Desjardins says.

Though now removed from her bench-side research days, Desjardins still sits between the science and the business as she did at Advanced Bioconcept, making sure Caprion is investing in the right areas. She says that founding another company and raising the funds would be much easier today than when she was just emerging from grad school. But, “the ingredients are always the same — you need an entrepreneurial scientist,” she says.

That business sense and the idea to start a biotech firm were things that Desjardins says came to her as “totally unexpected.”

Taking the Plunge
“I wanted to be a researcher, a professor at university. I don’t have people in my family who have a business background at all,” she says. “It was really being motivated by the idea that doing research is a privilege; it’s taxpayers’ money, which is directed to individuals to basically do whatever they want, and if you’re fortunate enough to discover something that is useful to others, I thought there was a responsibility to try and commercialize that.”

Desjardins acknowledges that in making a career change early on, she likely had it easier than those who choose to do so at later stages of their lives and careers. Nonetheless, she still faced an active resistance to get her firm up and running.

“I was told by several people, you know, commercializing scientific discoveries is not advisable,” Desjardins says, explaining that these people were of the belief that ideas in academia are shared freely, and that charging for use of a discovery is inappropriate. “And then I would say, well, how many people do you want to share your discovery with? A dozen? Half a dozen? That’s very nice, but I want to sell it to the entire world.”

Because discoveries made in a university belong to that institution, Desjardins says she and Faure had to negotiate with McGill to purchase the rights to their initial invention. Convincing McGill that their work had value was challenging, though, she adds. For one, they had to obtain a letter from Amersham plc (Buckinghamshire, U.K.), expressing its legitimate interest in purchasing the university-held patent.

“That should tell you that this is a market opportunity,” she says. “(Amersham) had in fact been working on it and they hadn’t cracked the code like we had. Much later, years later, we were in head-to-head competitions with them to make fluorescent peptides and they eventually just abdicated and said, hey, you guys know how to do it and we don’t. But when you’re just starting up and you have no support and no money, you don’t know that and it’s hard.”

In making the leap into the business world, Desjardins says she cannot think of anything she would have done differently. But she is glad she made an absolute transition, because only through accepting the risks and burdens of responsibility do the rewards come.

“When I see professors that are part-time in a company, that always worries me because they never really took the plunge,” Desjardins says. “They might be great and their ideas might be superb, but who’s going to think about how to commercialize this day and night — it’s not them, because they’ve kept the safety of their university position.”

The Business Ropes
Desjardins says the same process applies to business as when having to back up opinions with facts or to defend certain conclusions in science. Still, it was when she was joined by LeBlanc, who earned an MA in economics and politics from University of Oxford (Oxford, U.K.) as a Rhodes Scholar, and Segal, a Harvard Business School (Boston, MA) MBA graduate, that Desjardins says she really learned the business.

“The training at McKinsey is also like a specialized business school. So, I feel like I learned McKinsey business through them and we really learned business 101, which is, if you don’t sell a kit for $500, you can’t buy a chair,” she says. “So it’s not like the high-flying biotech years where you raise tens of millions of dollars and then you have five years to decide what you’re going to do with that. You have to make something for less than it costs you; you have to sell it for more than it costs you to produce — business 101. And it was a great discipline, and it was a great learning environment for me to become the business person that I am now.”

A key to success is having perseverance and believing in yourself, Desjardins says, as well as recognizing your limitations — technologically, personally and professionally.

“In our business, in the knowledge-based industries, it’s not good enough to do the same as someone else or slightly better,” she says. “To us, you always have to do something either completely different or a log magnitude better than someone else because that’s the only way we can command the premium deals.”

Caprion has already achieved major milestones, including the discovery of novel proteins associated with cancer, Desjardins says. The firm now plans to pursue these unique oncology targets in the form of immunotherapies, she says, as well as continuing its biomarker platform. Caprion will also be fulfilling M&A objectives within the next quarter or two, which Desjardins says will advance the firm into a “real integrated pharmaceutical R&D company.”

As for herself, Desjardins says each year has brought growing satisfaction from the initial work she took on to launch a firm.

“You know that it’s going to be life-changing, you know it,” she reflects on that early career decision. “I expected it to be more difficult, but the fact that I was a PhD scientist with a credible business plan . . . it really is a great thing to think that someone in Canada with a good idea and a degree can start a business from nothing because there are people and there are resources for you to draw upon that can make this possible, and that’s amazing. That’s not the case for a lot of countries.”