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case study


Katharine Sepp, chief executive officer, and Joost Schulte, chief scientific officer, co-founders of Oxalys Pharma, knew that they had discovered a promising new drug candidate for treating neurodegenerative disorders such as Parkinson's and Huntington diseases but the challenge was to figure out a way to successfully commercialize their discovery.

This was specially challenging as any new drug had to go through a very long, rigorous and expensive process before it was available for patient use. Getting connected to the right clinical and industry experts was critical to moving the discovery to commercialization. The question was how to accomplish this in an effective manner.


Ms. Sepp, an Ontario native, completed her PhD in neuroscience and genetics from the University of British Columbia and had primarily worked in the research area at various universities including Harvard Medical School and the Massachusetts Institute of Technology. Mr. Schulte was raised in British Columbia and completed his PhD in neuroscience from UBC and had both industry and research experience.

While conducting research at MIT, they developed a drug discovery model for neurodegenerative diseases. Their discovery was a drug that protects brain cells from accelerated aging that occurs in disorders such as Huntington and Parkinson's diseases. The drug they identified protects the brain in two ways. The drug activates cellular quality-control mechanisms that become less efficient with age. It also reduces the stress hormone cortisol, which has a degenerative impact on the brain if chronically high. Recently neurologists have found that high levels of cortisol could serve as an early indicator of these neurodegenerative diseases. This could allow for early detection and treatment via their new drug by nipping the deterioration of the brain in the bud. Also, since stress is found to worsen disease symptoms, the drug would be useful in later stages of these diseases. The duo formed Oxalys in 2010 while working together at MIT.


The solution came in the shape of a talk given at MIT by Sherwin Greenblatt, former CEO of Bose Corp. Mr. Greenblatt talked about the process whereby they introduced their revolutionary new speakers to the market. He said Bose knew they had a superior product but needed to find external validation for the same. Their solution was to find opinion leaders and influencers in the audio field whose views mattered and who were followed by consumers.

This led them to connect with a highly respected reviewer of audio equipment who wrote for a major stereo review magazine. The review got them the credibility and attention needed to successfully take their invention to commercial success.

Using a page from Bose's playbook, Ms. Sepp and Mr. Schulte decided to get external validation for their discovery before approaching development partners. They targeted the U.S. Food and Drug Administration's (FDA) Orphan Drug Designation Program that was designed to provide incentives for new drugs for debilitating rare diseases. The program provides product market exclusivity that can extend beyond the life of its patent, and gives fee exemptions and tax advantages. The program did not require any application fee and had a fast turnaround time for evaluation of the discovery.

The program was notoriously rigorous and required Oxalys to provide detailed information and data on their discovery. The team spent the next couple of months preparing the application in collaboration with a regulatory consultant. To save money, the founders did most of the scientific writing so as to save the consultant's billable hours. Oxalys received FDA approval in spring 2014, soon after which they used their network to make connections with a lab in Germany working on these diseases. The connection led to another lab in Germany that would help with commercialization, along with others in the Netherlands and Australia.


Ms. Sepp considers the network of collaborators formed as a "Dream Team" in their area of research. The influential partners have not only helped move the drug development forward but are instrumental in raising funds for the company. Oxalys is currently completing some pre-clinical work that will allow it to support the clinical trials of the new drug within a one-year time frame.

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studies of Mount Allison University.

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