Courtesy of Seth Herzon

On Oct. 15, Modifi Bio, a Yale-based biotech company, closed an acquisition deal with Merck, an American pharmaceutical company, with $30 million paid upfront and up to $1.3 billion in developmental milestone payments. 

Modifi Bio’s key innovation is a new compound known as KL-50, which may revolutionize the treatment of glioblastoma, a fatal brain cancer. The company was co-founded through the interdisciplinary collaboration between Ranjit Bindra, a professor at the Yale School of Medicine, and Seth Herzon, a professor in the chemistry department. 

“I don’t think we would have been able to really make this discovery without this type of collaboration,” Bindra told the News. “What I love about being at Yale is that these types of collaborations happen actually quite frequently because it’s encouraged in the culture of the community.” 

Bindra said that this type of cross-disciplinary research is uncommon but occurs quite frequently within Yale.

For decades, the best treatment option for glioblastoma was injecting temozolomide, a chemotherapy treatment with several limitations. 

Having administered temozolomide for several years, and seeking a more effective treatment option, Bindra approached Herzon in 2018 with an idea to find an alternative to the drug.

“He had given a lecture about small molecules and was doing a little bit of cancer work. He had heard about me as a DNA damage-repair person, and he was starting to move in the DNA damage space, and I was looking for a chemist to collaborate with,” Bindra said. “I always had an interest in biotech and medicinal chemistry, but didn’t know anyone at Yale [to collaborate with.]”

Bindra and Herzon also recruited Dr. Kingson Lin, a Yale M.D./Ph.D. student, to help discover the target compound by testing myriad molecular designs. Lin said he went through two or three iterations of testing nearly 100 potential solutions before he found one that could be effective. 

This novel compound, known as KL-50, is a DNA-damaging agent — a kind of molecule that has been common in cancer treatment since the 1940s. What separates KL-50 from other chemotherapy drugs is its remarkable selectivity, targeting only the DNA of cancerous cells.

Like other DNA-damaging agents, KL-50 begins by reacting with DNA in a process known as alkylation. In the case of KL-50, the alkylation involves a two-step process that eventually leads to the formation of a DNA interstrand cross link — or ICL. As the name suggests, ICLs bind opposite strands of DNA together, killing the cell.

When the cross links form in cancer cells, it prevents DNA from unwinding, which is a necessary mechanism to replicate DNA in cancerous cells, Lin explains. 

The issue with common DNA-damaging agents is that the DNA damage is not specific to healthy cells or cancer cells. KL-50 however, can target only cancer cells, leading to selective elimination of the tumor. 

After the discovery of KL-50 in October 2020, the team spent the next few months deciphering the reaction mechanism of the molecule and preparing to publish their findings. The team later founded Modifi Bio in 2021 to determine the effectiveness of KL-50 treatment to target cancer.

Herzon said that the founders initially raised about one million dollars from friends and family and later two and a half million dollars from the National Institutes of Health.

Clinical trials would require tens of millions more, and in 2022 the team initially could not raise enough, Herzon noted. 

The team also faced near bankruptcy in March 2023 when the Silicon Valley Bank collapse erased almost all the money they had.

“I think all the founders felt that at a certain point the fundraising was getting in the way of the science — the science wasn’t driving our decisions, it was fundraising,” Lin told the News. 

Merck’s acquisition of the company relieved many of the company’s financial restraints and made the prospect of clinical testing a reality.

Bindra explained that small companies have two main options — to be acquired by or enter a strategic partnership with a pharmaceutical company or raise funding through venture capital. 

During the early stages of Modifi Bio, the team did not have enough data to discuss an acquisition with a pharmaceutical company. Hence, the company went down the venture capital front route for approximately a year and a half. 

As Modifi Bio entered the first rounds of venture capital financing, pharmaceutical companies started approaching the founders. The team was especially excited when Merck approached them. 

“Rarely do you see pharmaceutical companies acquire a company this early, which is a testament to the science,” Bindra said. An acquisition by Merck was “hard to resist” given the company’s long history and expertise in drug development, experience in running large clinical trials and strong infrastructure for research and development.

Merck was equally excited about the acquisition. Modifi Bio’s innovative approach has the potential for treating some of the cancer types that are often most unresponsive to treatment, Dr. David Weinstock, the vice president of discovery oncology at Merck Research Laboratories wrote to the News. 

Bindra explained that the Modifi Bio team will still be involved after the acquisition. For now, Modifi Bio’s employees are Merck employees. Bindra and Herzon will also remain as consultants for Merck.

According to Bindra, the Modifi Bio team met with Merck in Boston so “people can understand exactly everything about the molecule, what our hopes and dreams were, what our plans were and making sure that they execute on that.” 

Modifi Bio team hopes most that the drug doesn’t get “shelved’’ — delayed or withheld from clinical use — for the wrong reasons, which often can happen after a transfer to a large company. However, the Modifi Bio team is comfortable with Merck, because of their “science-driven approach,” roots in academia and belief in translating “the best work forward,” Bindra said.

Bindra and Herzon continue to look for more opportunities to collaborate for drug development.

“Seth and I are always looking for the next oncology drug that we want to develop,” Bindra said. “We have a number of ideas that we’re percolating, and I think we hope to be bringing those out in the next year or two, and taking the learnings from this experience into the next one.” 

Merck was founded in 1668 and is the world’s oldest operating chemical and pharmaceutical company. 

Correction, Nov. 14: Herzon originally mistakenly overstated how much the founders raised from friends and family.