On the verge of CURING MS

Multiple sclerosis is a debilitating, often deadly disease that attacks the body’s central nervous system. It can devastate a victim’s brain, spinal cord, optic nerves and vision.

Approximately 400,000 people in the United States are living with MS. Worldwide, more than 2.1 million people are afflicted with the disease, many with different symptoms and levels of severity.

The disease is unpredictable. While treatments and medication currently on the market can help slow down the attacks, there is no cure.


But the cure for MS just might be sitting right in southeastern Wisconsin’s backyard.

Endece LLC, a Mequon-based drug discovery company, recently formed Endece Neural, a subsidiary company focused on neurological drug development. More specifically, Endece Neural is pursing the development of a drug that could help repair and even reverse the damage caused by MS.

Endece’s work is getting some attention in the world of MS research.

“We’re very excited about the Endece compounds,” said Jay Tung, president of drug discovery at the Myelin Repair Foundation in San Francisco.

Endece hopes to collect enough data so the U.S. Food and Drug Administration will accelerate clinical testing enough to have the drug on the market in five to seven years.

“We’ve already proven that our compound and even our backup compounds work in in vitro (in Petri dish) environments,” said James Yarger, chief executive officer of Endece.

The central nervous system is made up of the brain, the spinal cord and the optic nerves in a body.

“Everyone’s nerves are protected by a fatty substance, called myelin, that acts as an insulator and protects our nerves from being damaged,” he said. “As we age, the cells designed to produce that myelin naturally slow down.”

In a healthy individual, slowed myelin production is not a significant issue. However, for people with MS, their own body attacks the existing myelin tissue and leaves the nerves exposed and vulnerable to damage.

Once the nerves are damaged, nerve impulses traveling to and from the brain and spinal cord can become distorted or interrupted, which can sometimes lead to debilitations such as loss of vision, decreased motor skills and even movement, Yarger said.

“Existing therapies for treating MS are directed at the inflammation and the immune response aspects of the disease, not myelin production,” Yarger said. “Without the restoration of the myelin, there will be no cure for MS.”

Yarger and his wife, Jean, founded Endece six years ago after Yarger left Grafton-based Cedarburg Pharmaceuticals Inc., a company he founded in 1998.

Yarger left Cedarburg Pharmaceuticals to pursue his passion of drug discovery, he said.

“We founded Endece in order to produce a new, viable approach to drug discovery.”


The success of Endece so far has been backed by approximately $14.5 million dollars in private funds from four private investors in Wisconsin.

“All of them were truly vested in the concept and what we were trying to do from the very beginning,” Yarger said. “They had the net worth to do this, and I feel they wanted to give back to society. They felt like we were trying to and were going to do something important, and they wanted to be a part of it.”

The investors have asked to remain anonymous. Now that the company has founded Endece Neural, Yarger also will pursue additional funding beyond what the current investors have invested in the company.

“They can’t do everything, and with the new subsidiary comes new opportunity for investment and for growth,” he said.

Yarger and his staff at Endece focus on compounds that look similar to what the body already naturally uses, Yarger said.

Instead of taking compounds the body uses and inactivating their nuclear receptors, the parts of cells that are partially responsible for how that cell works with other proteins to regulate specific genes, Endece changes them and in turn changes how they react with certain genes.

“We discovered and patented that concept, and what we’ve ended up with is a proprietary library of compounds we can work with,” Yarger said. “Right now, we can’t and don’t predict what each little change will do. We let the chemicals tell us what they do. It’s very interesting, and it’s what led us to the opportunity for the MS compounds.”

Through their research, Yarger and Steven Nye, director of scientific programs at Endece, identified a small subset of chemicals that were able to essentially turn on the genes associated with the regeneration of myelin.

Dr. Bruce Trapp, professor and chairman of the department of neurosciences at the Lerner Research Institute at the Cleveland Clinic, is a world renowned expert on MS. Trapp, through Cleveland Clinic’s spin-off research company Renovo Neural Inc., was one of the first people to test the effects of Endece’s compound.

“Renovo Neural was contracted to do a blind test on the effects of the compound on the differentiation of myelin,” Trapp said. “Endece asked us to test a number of compounds for myelin formation in culture dishes.”

On more than one occasion, one compound showed significant promotion of oligodendrocyte differentiation and myelin production, Trapp said.

The oligodendrocyte cell is responsible for producing the myelin covering for nerves in the central nervous system.

“When one looks at therapies for MS patients now, there are some very effective anti-inflammatory therapies that can slow the attacks on the myelin, but they cannot stop it completely,” Trapp said. “That is where Endece’s compound comes in. If a drug could be developed that would actually repair the formation of myelin, I believe it would be used in combination with those anti-inflammatory therapies. It would not compete. It would be an add-on that would expand the number of treatment options currently available for MS patients.”

The next step

Not all patients are eligible to receive anti-inflammatory treatments, Trapp said. But all MS patients would qualify for a myelin repair therapy, he said.

The compounds have been proven successful in Petri dish environments. The next step, according to Trapp, is to test whether or not the compound will enhance myelin repair in animal models of MS.

Nye expects animal testing to begin within the next four to six months.

“We’ve got a significant amount of data that indicates our lead compound and even some of our backup compounds have the ability to signal pathways for oligodendrocyte differentiation and myelin production,” Nye said. “We’re currently doing formulation studies to decide what form of the compound is the most effective in getting the compound to the brain. It has to get there to be the most effective.”

Once its efficacy in the rodent model is proven, the next step would be toxicology and moving it into phase one clinical trials on human patients with MS.

“If it works, the end product will be a tremendous increase in the quality of life for MS patients,” Trapp said.

“The opportunities we have with these types of compounds are endless,” Nye said. “We’re confident this strategy will work, and if this particular compound needs to be changed, we have a whole library of compounds, and we’ll select the one with the best attributes that will definitely work. That’s the advantage Endece has. A lot of drug discovery companies have one shot. Our business model and our patents give us more opportunity to succeed.”

Yarger expects phase one clinical trials in humans to begin within the next two years.

“The Food and Drug Administration will occasionally accelerate reviews for products where there is currently nothing on the market,” he said. “As long as we can demonstrate safety and efficacy in the stages leading up to clinical trials we hope the process will be accelerated and we can potentially get this drug on the market within five or six years rather than seven or eight.”

A collaborative business

“The most important part of what we do, and what our investors liked about us, is that we didn’t form the company to do ‘me too’ things,” Yarger said. “Our concept was to see if we can truly make a difference, and our long term goals were to find some cures.”

The company has set out to do more than just extend life by a month or two, Yarger said.

“While that’s important, it’s also not sufficient, in our minds,” he said. “We know that if you don’t set out to find a cure, you probably aren’t going to.”

The four initial investors in Endece liked the concept that the company wasn’t spending money on building a huge laboratory. The company keeps a small full-time staff and forms partnerships with laboratories and research entities around the world.

“We’re not a mom-and-pop operation,” Yarger said. “Our business model allows us to work with the best advisors and the best labs in the world. We collaborate with the best experts on MS. We’re agile, and because of that we can move a lot more quickly than some firms who have to train their own personnel in their own laboratories.”

Endece approached the Myelin Repair Foundation once they discovered and patented the compound.

“Not only is the compound they’ve developed unique, the collaboration itself is unique,” Tung said. “Endece has been very, very open to discussion with us. Even though they have the proprietary chemical compound, they recognize the expertise that our foundation offers. They realize that we have the critical tools to move this process forward, which ultimately is what we want to do.”

Endece is also working side-by-side with the Cleveland Clinic and its spinoff company Renovo Neural and is in discussions with the National Multiple Sclerosis Society, Yarger said.

“The most important thing for Endece and its investors is that we get the drugs to the patients who need them properly and as soon as possible,” Yarger said. “It seems like an obvious track, but the way to do that is to get input and collaborate with the experts who’ve studied the disease.

The fact that we’ve been able to produce and test effective compounds in such a short period of time is proof that the collaborative model works effectively. We own the patents to the compounds so we aren’t worried about someone stealing our ideas.”

Endece shares the structure of the compounds under confidentiality agreements with the labs and organizations it works with.

The collaborative spirit is refreshing for Tung, and something he says has helped speed up the testing process for the Endece compounds.

“Pharmaceutical and bio-pharmaceutical companies are traditionally very guarded with their information. That forces things to take a very long time to get to the stage where the Endece compound is at,” Tung said. “Endece sees the value in collaborating with the people on our boards and our research advisors. Because of the culture Jim has set up at Endece it has allowed us to move this forward and accelerate the entire process throughout this continuum. Most of the time it doesn’t work that way. In fact, it generally doesn’t.”

Tung, like Yarger, expects the Endece compound to be in Phase 1 clinical trials by 2014.

“I do think that’s an audacious goal, but we believe together we have the strategy to do that,” Tung said. “The normal timeline for a venture like this is about four to five years. We think we can accelerate that. We are investing time and resources into Endece’s venture, and we view Endece’s collaboration as a medium to short term length strategy.”

Yarger plans to take the same collaborative approach once it comes time for the company to select a pharmaceutical company partner to manufacture the drug. He also plans to take a serious look at some Wisconsin companies for at least one site for the clinical trials.

“What we do well is drug discovery,” Yarger said. “Our business model is to get us to clinical trials and currently our strategy is to not go beyond that phase. We plan to partner with a pharmaceutical company, license the compound to them and, with our input, have them take it where it needs to go.”

Yarger hopes Endece can be an example of how collaboration can lead to success.

“I hope we can be a good model for others,” Yarger said. “Maybe collaboration is the way things in the pharmaceutical world need to get done from now on. This process has at least proven it can make things move faster, all for the benefit of patients who need treatment.

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