1. Health

Moffitt research offspring moves beyond cancer

Published Mar. 17, 2012

TAMPA — M2Gen is in a pitched race to stay ahead of its biotech competition.

The for-profit research arm of H. Lee Moffitt Cancer Center, M2Gen marshals computer calculating power to match genetic markers in patients to find and custom-tailor the right treatment.

It's heady stuff in a field that changes so rapidly it's easy to get left behind.

For 5-year-old M2Gen, that means broadening its scope for the first time beyond cancer to other diseases, including heart, circulation, diabetes and obesity. It also means partnering with research labs, hospitals and drugmakers that want access to its patented learning technology, and hiring investment bankers to land investors willing to bankroll acceleration of its work.

"The work we've done on cancer can be applied to finding the best treatments for other diseases," said Dr. William Dalton, Moffitt's chief executive.

The moves come at a critical time for M2Gen, which over its five years has spent more than $137 million in public and private investments and lost about $900,000 on revenue of about $10 million in 2011. Moffitt has contributed about $5 million and a $1.5 million line of credit to M2Gen.

The job is important enough that Dalton is leaving his $1.1-million-a-year job leading Moffitt to become M2Gen CEO in July.

"I asked to do it because I am passionate about making this happen," said Dalton 62, who turned over control of Moffitt to groomed successors Drs. Alan List and Thomas Sellers, as chief executive and center medical director, respectively.

The numbers underscore the downside of Tampa Bay and Florida governments' economic development strategy to become a hub for biotech medical research: Findings are elusive, returns on investment take a long time and sure things are rare.

"It's incredibly expensive and the technology changes so fast that we are seeing improvements in DNA sequencing that were inconceivable just two years ago," said Dr. Boris Pasche, director of hematology and oncology at the University of Alabama at Birmingham.

The first five-year partnership with Merck & Co., which poured $60 million in cash and $30 million in in-kind services into cancer research, ended Dec. 31 with the drug giant signing on for another year at a lower rate while giving up exclusive rights.

That freed M2Gen to sign up two drugmakers (that the company would not identify) and strike a vascular medicine research partnership with Sanford-Burnham Institute in Orlando and the Florida Hospital, the state's largest hospital network.

M2Gen is talking about taking on biorepository storage work for a new state-funded USF College of Medicine research partnership proposed with the American Cardiology Society.

Moffitt this month launched what it calls the Personalized Medical Institute to oversee collaborations with M2Gen.

Similar to Moffitt's pioneering Total Cancer Care therapy, which has been a national frontrunner for a decade, personalized care is the latest buzzword for moving modern medicine from a "find it and try to fix it" mentality to a predictive, preventative one. One way to get there is by linking genetic markers to treatments that worked best based on similar cases tracked by a huge and ever-growing database. Therapy decisions that once took days or weeks theoretically could take minutes.

M2Gen helps by applying its research learning machinery. So far, M2Gen has used only 20 percent of its 2.5 million tissue-sample freezer and, with Oracle, has developed patented software that matches and groups patient markers with successful treatments. The database, which has grown from only Moffitt patients to those treated at 18 facilities in 10 states, now stores and tracks tumor samples of 85,000 patients. Patients are tracked for life, learn whenever a new treatment is found that might benefit them and have access to their digital record.

To get to more meaningful results faster, however, M2Gen's patient database needs hundreds of thousands if not millions of samples. Meantime, a down economy and a wave of mergers muted much of drugmakers' interest in discovery. Plus the medical research world has changed since M2Gen was conceived eight years ago.

"Moffitt was first to build a cancer database, but everybody is doing that now," Pasche said. "It's going to be hard to generate much cash selling the information. Their only real advantage is already having one of the largest databases."

That's why Dalton wants to step up M2Gen's growth before others catch up.

"We have to get into more data gathering, we need to develop a modeling business and we need more partners," he said, predicting doubled or tripled revenues and profitability in a year or two.

With Merck, M2Gen looked for ways to shorten the time and expense of clinical testing for new drugs. In one venture with the National Cancer Institute, for instance, M2Gen found and tested 37 colon cancer patients who genetically met certain illness requirements in 10 months, a fraction of the normal time.

The Affordable Healthcare Act promises to prod hospitals to computerize their patient's medical treatment records far beyond the 1.5 percent that do now. Only about 3 percent of patients ever get in clinical trials, while Dalton cites studies suggesting two-thirds would benefit from them. That's why he sees a huge opportunity to save on health care costs by linking patient history to marker-matching databases that prescribe the right therapy the first time. Ultimately, he sees patients carrying their entire electronic medical record on a card.

But that's years away. Meanwhile, the management shuffle has produced some grumbling among the rank and file at Moffitt, a nonprofit that generated $566 million in annual revenue in 2011. The 204-bed clinic and research institute, which employs 4,400, is coping with a rising flow of patients and declining revenue per patient because of reduced Medicare and Medicaid payments and tighter government research grants.

Dalton concedes Moffitt faces some belt tightening, but thinks he can avoid layoffs. Help, too, is coming from the Legislature, which just earmarked $5 million in annual revenue from state cigarette taxes for 20 years that will help bankroll construction of the Moffitt campus on McKinley Avenue, north of Busch Gardens, in Tampa.

"But we cannot afford a bunker mentality," he said. "We need to generate new sources of revenue for Moffitt like M2Gen. And to maintain our top reputation we have to be smart about staying on the creative edge of medical innovation."

Moffitt, which owns all of M2Gen, hired investment bankers to find investors interested in providing expansion cash in return for minority ownership. Moffitt would keep controlling interest and share in the M2Gen revenue while keeping ownership of the freezer repository. How much is raised will guide the speed of Dalton's acceleration plans.

The state, city of Tampa and Hillsborough County spent about $37 million in tax money to launch M2Gen in 2006 in return for 160 new jobs. M2Gen has met the local government requirements, which were based on job creation to boost the economic development promise of the bay area's life sciences research cluster. Most of the money went into land and equipping a new building M2Gen rents from Moffitt.

"We have an educational mission to help build the Tampa Bay life sciences cluster," Dalton said. "That requires being at the forefront to keep attracting top talent. They will create more jobs and spinoff businesses. Having talent there is why Boston and the Research Triangle (in North Carolina) attract leading-edge research while Tampa is still seen as somewhat risky."

Mark Albright can be reached at or (727) 893-8252.


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