Arylomycin’s “target was known as [the enzyme] signal peptidase, and a number of companies went after signal peptidase for all the reasons that we thought it was cool,” said Avalon partner Court Turner, president and CEO of RQx.

But arylomycin – though “conserved across all bacteria, including tuberculosis and malaria,” and “expressed in a place on the cell where it’s much more accessible than some of the other targets” – could not be made to work, Turner said.

“It had all the things you want to check the box on for an antibiotic,” he said. “We just didn’t have the insight.”

Enter Romesberg and two graduate students, who found that, by switching one proline, they made arylomycin newly effective against signal peptidase, and thereby may have come up with the start of a new class of antibiotics, not seen since the quinolones were introduced. RQx hired both grad students. Romesberg remains a “very involved” advisor, Turner said.

“In the first year [of the company’s existence], we had generated synthetic compounds that had eluded big pharma for the previous three decades,” he told BioWorld Today. “There was some luck, but if anybody was going to figure it out, it certainly was going to be this small, focused group,” he added, noting that “for the previous six years of [the grad students’] lives, that’s all they thought about.”

The deal effectively is an exit, since “once our interaction with Genentech is done, there’s not much else for RQx to do,” Turner said. RQx hopes “what we’ve done here will spawn multiple products against multiple pathogens,” he said.

Other Avalon-backed companies to find similar success include Zacharon Pharmaceuticals Inc.’s buyout by BioMarin Pharmaceutical Inc. for $10 million up front, and Afraxis Inc.’s licensing deal with Genentech, valued at up to $187.5 million. (See BioWorld Today, Jan. 29, 2013.)

Getting involved early and installing Avalon partners at high levels in new companies are keys to success, said Avalon’s Jay Lichter. “The partners source the deals, manage the deals, live with the deals and exit them,” he said. “We’re all entrepreneurs, and we all have run companies, large and small, [so we] have learned the key things about success in these companies. It’s not always picking the right technologies – it’s picking the right teams and technologies. We can augment the skills of the entrepreneurs, depending on what they’re great at.”

Cutting-edge science and a solid team are important elements, as well as research that has just begun, he said.

As a biotech firm, “you can get to the end of Phase II, but now your only opportunity is to deal with a big pharmaceutical company,” Lichter said.

the right pharmaceutical company can be difficult,” not to mention “a variety of exogenous factors unrelated to your business” that must be handled, he added.

“We like to not look at these progressive diseases that slowly get worse over time, but other than that, we’re really quite agnostic when it comes to indications, as long as there’s a tractable clinical path, a tractable discovery path, and there’s a reasonable market,” Lichter said. “We invest in a lot of projects that other people won’t touch.”