Kirsch Foundation Targesome donation

Helping to find a treatement for cancer

History
While having my injured knee (I had an ACL reconstuction done in late Sept 1997) scanned on a MRT unit (an MRT is a "real-time" MRI; there are only 3 of these in the US right now) at Stanford Hospital on October 5, 1998, I met a physician, Joon Yun, working on a computer in the control booth. He was using Yahoo Clubs, and since we at Infoseek were working on a similar project, I asked him if our product managers could contact him. In the course of e-mail conversations, he mentioned he was a founder at a start-up cancer company called Targesome. I asked what Targesome was (my step father had just been diagnosed with inoperable stomach cancer) and one thing led to another.

The Targesome staff and their wives are pictured here during Christmas 1998. Dr. Mark Bednarski couldn't make it. That's me behind the camera, taking the picture! This was taken with my Kodak DCS-520 digital camera.

Targesome benefits
Targesome is a biotechnology company developing novel targeted agents for the diagnosis and treatment of cancer. It was started by some MDs and PhDs at Stanford who patented (and later purchased that patent back from Stanford) a large molecule (called Targesome) that has several very unique properties including:

• the ability to accumulate in a growing cancer when injected into the body at very low dosage levels. This is achieved by the Targesome's prolonged intravascular confinement and ability to target molecular receptors found in vessels of growing tumors. This is very unique. Only one other group has a particle that can stay in the bloodstream without being eliminated quickly.
• the ability to carry a large "payload" of either a diagnostic agent (for imaging cancers) or a therapeutic agent (for killing cancers)

The preferential accumulation and large payload yield a very high target-to-background ratio (600:1). Thus, when an imaging test is performed using Targesomes, for example, the cancer is easy to see because the background noise is low. Furthermore, when a therapeutic is attached to the Targesomes, the high target-to-background ratio means that the medication is concentrated at the site of the cancer, and low amounts are spread throughout the rest of the body so that side effects are minimized.

Currently, cancers are not detected and localized until they reach a relatively large size (at least 1 cm) when they are likely to have metastasized (spread to other parts of the body), rendering them incurable. For diagnostic imaging, the high target-to-background of Targesomes enable the detection of small cancers at a very early stage (millimeters) when they are more amenable to treatment. Early animal work, including an article published in Nature Medicine, has already validated this approach. For therapeutics, Targesomes enable high dose therapy focused at the cancer while relatively sparing the rest of the body. This approach was evaluated in animals in 2000 with phenomenal success (very aggressive rabbit tumors were completely eradicated within days without killing the rabbit). In 2000, the chemistry was optimized for reliable manufacture and for maximum effectiveness. Clinical trials should begin in 2002 and will be paid for by a major drug company.

The bottom line: Targesomes, with their unprecedented ability to preferentially accumulate in cancers, may be the closest thing to a magic bullet against cancer. While not a cure, this approach appears to be a highly effective diagnostic and (potentially) treatment against most forms of cancer.

Cancer detection using Targesomes will be achieved with a simple, inexpensive, whole body scan which can be performed in 20 minutes in a gamma camera, a machine available in most hospitals. It can replace head-to-toe CT scans, MRI's, bone scans, and other diagnostic tests which are far more complicated, expensive, and can only detect cancers at a relatively late stage, and which are normally done only in specific small areas of the body.

The implications are enormous:

• Once a year, you could get a "whole body" Targesome cancer screening scan. This scan, which takes only about 20 minutes (you have to be injected the day before), will "light up" any area where angiogenesis is taking place (angiogenesis, which is the growth of new blood vessels, is always present in any cancer larger than a mm). So, this will tell you all the places you might have cancer. It gives immediate accurate information to your doctor as to the stage of the cancer (how far it has already progressed). Also, if you are one of 5 million Americans living with cancer today, you can receive the same Targesome scan every 3-6 months to catch recurrences early. With current medical technology, all of these tests are impossible today. Targesome makes such a test possible. Clinical trials could start as early as Jan 2002.
• Once you know where the cancer is, you may take a similar injection to deliver radiation (instead of a diagnostic imaging agent) that accumulates preferentially in the cancer. Very large cancers could be surgically removed. If angiogenesis is occuring elsewhere in the body (e.g., if you just had an injury that is healing), there are several options including: (1) treat anyway---killing cancer immediately and delay wound healing for a short time; (2) let wound heal and treat cancer immediately thereafter; (3) use Targesomes for delivering therapeutics that can be externally activated (e.g., by x-rays) only at sites of interest (under investigation).

A week after first meeting Joon, and after a lot of due diligence (the VCs that turned them down did so for generic risk reasons in the medical field where new drugs can take 10 years or more and cost hundreds of millions of dollars or because the IPO market was weak at the time, not because they didn't like the science), I wrote them a check for $2M to provide their first round funding, outbidding their best venture capital offer (which only came in after I said I would invest).

The clincher was the opinion of Targesome science I received from Dr. H. William Strauss, the chief of nuclear medicine at Stanford and the president of the 16,000-member Society of Nuclear Medicine. He was previously chief of nuclear medicine at Harvard's Massachusetts General Hospital. He is also a veteran of the pharmaceutical industry as vice president of diagnostics drug discovery at Bristol-Myers Squibb.

I asked him, "Look, there are a lot of cancer cures out there, but this approach that Targesome is taking sounds really exciting and unique. If you had $2M to place your bet on which technique will finally prove to be effective, where would you place your bet? With them?" He said he would, confirming my intuition.

So this was a no lose proposition to me since I viewed it as a $2M "charitable contribution towards cancer research" and I expected no monetary return whatsoever. If they totally fail, I will have felt fine about having made an intelligent contribution to cancer research. While the $2M wasn't "charitable" (it was a Series A equity financing in their company which is a "for profit" entity), if the company fails, I get to deduct the $2M as a capital loss. In fact, I get better tax treatment by investing in charity this way than if Targesome was a 501(c)(3) charity (since I'd have a 30% AGI limitation in that case)! I told the company founders my objective, unlike that of typical venture capitalists, was to cure cancer, not return on investment. So I told the founders that if the company succeeds like I believe it will, that I'd donate the profit back to charity. So the potential for upside (the upside being a monetary return on the "donation" that can be used to fund future charitable donations), was incredible icing on the cake.

Because I was willing to write the $2M check so quickly, they were able to start immediately on the experiments, and it saved them months of delays with venture capitalists. If successful, that translates into a cure arriving to the marketplace months sooner. And that translates into thousands of lives being saved.

In a recent e-mail, a Stanford medical researcher suggested Targesome could be used to detect cancers smaller than 1mm, and we believe this to be true. The concept using radiolabelled annexin to image apoptosis has already been shown. Using Targesome with annexin will increase the sensitivity tremendously, allowing imaging of cancers before angiogenesis.

If you view our charitable giving guidelines, Targesome as a "pure charity" scores 79, a very high score (out of a max possible 96). The potential for monetary upside beyond achieving the charitable objective, makes this a very attractive and unique donation. However, because Targesome was not a charity, this is the only donation that we were not able to make from our charitable foundation (which is restricted to donating to 501(c)(3) charities). However, we're in the process of transitioning our foundation to be a supporting foundation, and in that case, the IRS allows us to "invest" our endowment in startup companies such as Targesome.

Ironic sidenote
I met with Robert Swanson, founder of Genentech, recently. Turns out he's now a venture capitalist and invests in Internet companies. Couldn't help but see the irony of it all. Here he is, a guy who made his fortune in biotech, and now he invests in Internet companies. And here I am, a guy who made his fortune in Internet, and I now invest in biotech companies. Swanson died recently of brain cancer.

Targesome links
Here's a pointer to the Targesome home page.

Other applications
Here is a list of potential applications of targesome model, many of which are conceptual only with no proof of concept yet. some are diagnostic applications while others are therapeutic:

angiogenesis
cancer, ischemia, macular degeneration, rheumatoid arthritis, wound healing, embryology

inflammation
infections, multiple sclerosis

vascular
artherosclerotic disease, thrombosis, endothelial apoptosis, leukemia

Links
Steve Kirsch home page
Targesome home page
Charity home page
Why and where we give, and the criteria we use to evaluate donations