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Mission Statement

"To revolutionize drug screening and biosensor development through the application of yeast-based receptor engineering"


Drug Screening Rationale

We believe that there is a major opportunity for a Biotechnology company that focuses on G-protein coupled receptors. The commercial potential lies in two main areas: Drug discovery and Biosensors. Although these are diverse endpoints, they rely on shared technology, and allow Nepkar to spread its future options. The main focus of the Company will be on drug discovery, however, as it offers greater scope for short term revenues.

Two recent developments have accelerated the pace of drug discovery. The inexorable drive of genomic research (in particular, from the Human Genome Project) is generating large numbers of potential drug targets. In the absence of rational routes to target selection, there is an urgent requirement for better ways of identifying lead compounds that allow the potential of these targets to be explored. In some cases this leads to the isolation of new subclasses of receptor, usually in the absence of any previous pharmacological evidence for their existence. As well as new sub-classes of receptor, this approach often identifies more distantly-related sequences, encoding receptors with as yet unknown ligands - the so called orphan receptors.

The distribution and function of the subclasses of G-protein linked receptors can differ dramatically, and it is likely that the development of subclass-specific drugs will give fewer side effects. The development of such drugs is the target of most of the major pharmaceutical companies, and is dependent on the application of new chemistries and screening technologies.

The second development is combinatorial chemistry, which has recently emerged as the most powerful technique for identifying and refining new drug leads. It is based on the use of automated solid-phase chemistry and can generate astronomical numbers of compounds in weeks. These numbers have in turn put pressure on biologists to develop screening techniques to cope. Generally speaking these involve the use of cell-lines engineered to express a receptor of interest. These parallel developments in combinatorial chemistry and gene research are revolutionizing pharmaceutical research, creating the need for high-throughput screening.

Existing Screens are Inadequate

The problem that limits most high throughput screens is the complexity of the screen. Most antagonist screens rely on displacement of radioactively-labeled ligand by the test compound. This type of screen involves numerous addition and washing steps, requires radioactivity counting, is expensive in consumables, and generates a lot of waste. There are an increasing number of non-radioactive, one-step screens using new technology such as scintillation proximity (SPA), however these are expensive and require extensive development.

Smart Screens

Recognition of these problems has led to the development of so-called smart screens, in which activation of the target receptor is coupled to some cellular response for which there is a convenient assay. In many cases this response is activation of expression of a reporter gene encoding an enzyme, whose expression can be monitored by production of a colored product. Examples of commonly used reporter enzymes include b -galactosidase, b -glucuronidase, and luciferase. The identification of intrinsically fluorescent proteins such has GFP (green fluorescent protein) represents a significant advance in the technology, removing the need for the addition of exogenous substrates. Development of smart screens is not straightforward, however, usually involving molecular biology to engineer a responsive cell-line using the target receptor.

Although their use is increasing, smart screens have drawbacks as well. Because they are dependent on signal transduction, they require living cells to function. In most cases this means mammalian (or insect) cell-lines for convenience. Such cells are relatively fragile, and there are numerous ways in which irrelevant toxic compounds could interfere with signaling, giving rise to a false positive in an antagonist screen.

The Opportunity

The opportunity for Nepkar is to develop the next generation of smart screens for G-protein linked receptor agonists and antagonists. We will do this by using yeast as the host cell for the receptors. Longer-term, we will investigate solid-phase screening technologies using arrays of pharmacological receptors on chips.

Why Yeast?

Yeast is an ideal organism to use in screening applications. Yeast is where microbe meets man. It shares many of the fundamental cellular mechanisms of mammals, including signal transduction pathways, yet these are wrapped in a robust cell wall. Because it is a microbe, it lends itself to powerful selection approaches (accelerated evolution) to drug screening. This potential has already been recognized, and the ability of mammalian receptors to couple to yeast signaling pathways has been demonstrated.

Nepkar's approach is to capitalize on the flexibility of yeast genetics to create strains carrying functional human receptors for use in ultra-high throughput drug screening. Yeast has particular advantages over approaches based on mammalian cell lines:

Why GPCRs?

Brand1995 Revenues US$m

A list of human G-protein linked receptors reads like a pharmacopoeia. Their ligands include acetyl choline, adenosine, adrenaline and noradrenaline, angiotensin, dopamine, endothelin, gaba, histamine, 5hydroxytryptamine, opioids, oxytocin, platelet activating factor, prostanoids and thrombin. Many of these receptors already have an extensive pharmacology, with well characterized antagonists and agonists. In many of the above examples, this research has led to the discovery of drugs of major clinical significance. For example, antagonists of the H2 histamine receptor act as inhibitors of gastric acid secretion; and various classes of adrenoreceptor inhibitors as treatments for hypertension and as bronchodilators in asthma.

18 of the top 100-selling drugs are GPCR-targeted, and 60% of all drugs affect GPCRs. Over $11 billion of GPCR-acting drugs were sold in 1995.

Why Nepkar?

The main difficulty is that although mammalian receptors are expressed in yeast, and are inserted into the membrane in a functional form, their ability to couple to yeast G proteins is severely limited. Nepkar will solve this problem by using selective pressure to identify yeast strains which couple effectively to the target receptors. There are two components to Nepkar's technology for achieving this:

The first involves constructing a library of mutant yeast Ga sub-units, co-expressing this with the gene for the target receptor, and selecting for signal transduction in the presence of the ligand for the receptor. The selection will be for resistance to the drug G418 conferred by a gene (neomycin phosphotransferase) the expression of which is dependent on activation of the signal transduction pathway.

The second component of our technology involves covalent-tethering the yeast Ga -protein to the receptor by engineering a receptor/Ga -protein fusion construct. This proprietary technology, developed by Professor Graeme Milligan of Glasgow University, gives rise to targeted coupling in mammalian cell systems, and we believe holds the key to achieving high efficiency coupling in yeast. Nepkar has negotiated an option on an exclusive license to the technology, and Professor Milligan has agreed to join the Science Advisory Board.

The potential of these responding yeast strains in drug discovery is enormous. Consider a yeast strain engineered to respond to endothelin by expressing luciferase. Libraries could then be screened for novel agonists simply by spotting compounds, singly or in pools, on agar plates covered with a lawn of the yeast strain. Hits would literally be lit up as luminous zones on the plate. A different configuration would be used to screen for antagonists. The yeast would be engineered such that the natural ligand (say endothelin) triggered growth arrest. This is simple to accomplish using the yeast mating-hormone-response pathway. The screen would again use plates covered in a lawn of the yeast, only this time in the presence of endothelin. Antagonists would be revealed by the zone of growth they would permit by preventing ligand binding.

This approach to drug screening is applicable to all G-protein coupled receptors, and will be the technological expertise that underpins our collaborations with pharmaceutical companies.

Although the use of yeast in this way will revolutionize screening, it still has some limitations. There may be some receptors for which coupling is inefficient or impossible without considerable development and optimization. Although robust, the screens still require that the yeast functions as an organism; thus false positives may be generated in an antagonist screen through toxicity or alternative sites of action of a compound.

Our long term aim as a company is to develop effectively solid state signal transduction, in which purified receptors, embedded in a membrane, can be used directly to transduce an electronic or optical signal. This technology also forms the ultimate goal of our biosensor program. Because these devices only have one biological component, and because there is no requirement for cellular metabolism, they will be more robust and less prone to false positives than even yeast-based screens.


Company Structure

Nepkar is a new company, initiated in September 1996 by Mr Andy Alias and Dr Mark Alias (who was until recently Director of Biotechnology at British Biotech plc, a large pharmaceutical-research company). This initiative has the backing of the British Biotech management, and British Biotech will retain a 15% stake in Nepkar in return for transfer of intellectual property rights relating to receptor engineering technology, equipment, know-how relating to drug screening (10%) and a cash equity investment (5%).

The Company will be based in the Oxford, UK area to capitalize on a growing network of Biomedical companies centered on Oxford University.

Progress to date

The decision to proceed with the Nepkar concept was taken in September 1996. Since then, we have made significant progress in establishing the business and scientific basis for the new Company.

We have now reached the stage, therefore, where we need to commit to a lease on premises in the Oxford area and to start recruitment. We plan to start independent laboratory operations during June 1997. A list of these and other key milestones is given in Appendix 2.

Nepkar's Products


This is the drug discovery service which will be marketed to the pharmaceutical industry. It is based on a core of technology and know-how relating to the expression of human G-protein coupled receptors in yeast. The stages in the process are as follows:

  1. Project definition - the client will nominate a receptor, provide information on the ligand, and the best screening format will be discussed. Milestones, timing, and criteria for success will be agreed. A Nepkar contact person will be nominated.
  2. Receptor expression - Nepkar will either clone the receptor, or modify existing clones supplied by the industrial partner. The receptor clones will be adapted for use in Nepkar's own vectors, and epitope tag sequences will be added so that expression can be monitored.
  3. Receptor coupling - The expression vector will be transferred into one of Nepkar's proprietary yeast strains that allow us to select for optimal functional coupling between the receptor and the yeast signaling pathway.
  4. Screening strain - The strain carrying the coupled receptor will be modified to configure a screen according to the clients specification.
  5. Validation - The screen will be validated for specificity, reproducibility and robustness using panels of in house compounds, and standard compound sets supplied by the client.
  6. Technology transfer - The strain will be transferred to the client together with a full documentation package including protocols and strain specification.

Each of these stages ends in a clearly defined milestone. These will be used to monitor the course of the project. A generic project plan is shown in Appendix 4 (timings are approximate and will vary according to the screen format desired). Liaison with the client will be on a monthly basis.


Nepkar's biosensor technology is explained in Appendix 8. GPCRs are mutated to be able to detect trace compounds of commercial interest - e.g. pollutants, illegal drugs, toxins. The development of biosensors requires substantial instrumentation, marketing and distribution resources which Nepkar lacks. Nepkar will therefore only undertake development of biosensors in collaboration with a partner willing to contribute those resources. To co-ordinate the biosensor development effort, Dr Bill Alias has agreed to join Nepkar's board.

Table of ContentsAppendices
1. Executive Summary
2. Background
3. Markets
4. Operations
5. Finance
Cashflow Summary
Revenue Forecasts
General Overhead
Laboratory Costs
Capital Expenditure
Project Plan
Intellectual Property
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