In the modest south Edmonton office of his latest drug-development company, Dr. Robert Foster can now chuckle about the day in 2007 when his net worth crashed from $30 million to $250,000.
The pharmaceutical scientist, businessperson and professor lost his fortune with the collapse of Edmonton-based drug company Isotechnica.
The company had been formed to commercialize Voclosporin, an immunosuppression drug Foster had created with a team of University of Alberta scientists and medical researchers.
Isotechnica was as good as gone, but Foster never lost faith in Voclosporin’s medical potential.
Today, after an incredible 26-year tale involving the cold-hearted realities of the international drug-development world, politics, betrayal, drug regulation and a never-ending search for investment cash, Dr. Foster has been vindicated.
After successful trials concluded before Christmas, Voclosporin will likely be approved for human use by the American Food and Drug Administration (FDA) as a treatment for patients suffering from lupus nephritis.
Shares in Aurinia, the drug development company that took Voclosporin (as a lupus treatment) through its “clinical trials” jumped from $5.44 a share to $25 following the rannouncement of successful tests in human patients.
What a long and winding road it has been.
Back in the ‘90s, Foster and his team saw Voclosporin’s main potential as a new, improved post-organ transplant anti-rejection drug. Isotechnica was created as a publicly-traded company to take Voclosporin from the laboratory through the multi-million-dollar trials required for any new drug to be approved for human use.
In 2002, Isotechnica hit pay dirt. The giant drug company Roche made a deal with Isotechnica that, had milestones been hit, would have been worth $400 million.
Roche was backing Voclosporin/Isotechnica as its horse in the global drug-development race to replace aging and less-effective existing anti-rejection drugs.
My goodness, Isotechnica became the company of choice for investment-minded Edmontonians! Foster and his associates were the toast of the town.
Just as Isotechnica was readying for the third and final round of human clinical tests required by the FDA — at a cost of some $50 million — Roche pulled the plug on developing anti-rejection drugs in general and Voclosporin in particular.
“Roche left us at the altar,” remembers Foster. “Its board decided to get out of transplant drugs. They had invested $70 million at that point. In 2007, they just walked away.”
For reasons unrelated to Voclosporin’s medical potential, the drug development financial world lost interest in new anti-rejection drugs. “Isotechnica was reduced to a penny stock, and we were trying to raise $50 million for our Phase III trials,” says Foster. “Nobody was interested.”
Back in the salad days, Isotechnica had licensed another possible use of Voclosporin, as a treatment of lupus, to Aurinia , a specialty drug-development company in Victoria, B.C.
What was left of Isotechnica was merged with Aurinia. Isotechnica shares became Aurinia shares. Aurinia was revitalized, especially when a Korean drug company became its lead investor. The money needed to undergo the final trials on Voclosporin as a treatment for lupus was raised.
The rest is history. After successful trials, Voclosporin is expected to be approved for human use by the FDA, bettering the lives of five million people worldwide suffering from the kidney disease. “I knew it would work,” says Foster matter-of-factly. “I designed the drug.”
In the meantime, a few years after the merger, Foster resigned as Aurinia’s CEO and sold his interest in the company. Not as any kind of protest, Foster says, but to concentrate on developing new immuno-suppressant drugs back in his laboratory in Edmonton, for his own company. Besides, he will still receive a royalty on Aurinia’s lupus drug sales.
The excitement hasn’t stopped for Foster. In his early 60s, he’s enthusiastic about the potential of his latest drugs to treat fatty liver disease. To that end, Foster has started a new public company. Hepion Pharmaceuticals has its laboratory and executive office in Edmonton, its business office in New Jersey.
“Maybe I’m a little crazy,” grins Foster. “But for all the ups and downs, it’s been a great ride. I’d love to do it again!”
By the way, if you’d held on to your Isotechnica stock at $2 a share 20 years ago, it’d be worth $25 in Aurinia shares today.
(Editor’s note: This story has been updated to reflect Voclosporin’s status in trials.)