When Daniel Chain invited a colleague of his father to breakfast in the fall of
1996, the young biology researcher didn’t expect the meeting to lead to the
founding of a biotech start-up.
“I asked Keith Mansford for his honest
evaluation of an idea I had for treating Alzheimer’s disease,” recalls Chain,
who, at the time, was studying the memory mechanism of snails at Columbia
University. “I told him that if he thought the idea was totally crazy, I would
stick to my snails, but he got very excited about it.”
seasoned pharmaceutical executive who worked for many years with the British
Beecham- SmithKline Group, urged Chain to go straight from the New York City
restaurant to see a patent attorney. Before they parted, he even insisted on
signing an improvised confidentiality agreement on the back of a paper
“I wanted him to be able to declare that no one else knew about
the idea so that he would have no trouble registering the patent,” Mansford
tells The Jerusalem Report
, noting that the patent for a medical therapy Daniel
Chain’s father had invented was something the young biologist’s father had
bristled over for many years.
The patent that had eluded Daniel’s father,
Sir Ernst Chain, was for one of the greatest medical discoveries
ever made – penicillin.
For his role in establishing the curative
properties of penicillin, Chain did receive the 1945 Nobel Prize for Medicine,
together with Sir Alexander Fleming and Sir Howard Florey. However, the
administrators of Oxford University, where Chain and his colleagues developed
the drug during World War II, ignored Chain’s advice and failed to file for
patent protection. Consequently, after an American drug manufacturer registered
various patent claims, Oxford did not share in the profits – and even had to pay
hefty royalties to the US patent holder for processed penicillin that its
researchers required for their own experiments. (See The true penicillin hero on
page 35.) Daniel Chain did heed Mansford’s advice, and quickly applied for a
Over the 15 years that have passed since then, many of Chain’s
prescient ideas about developing drugs for Alzheimer’s have become widely
accepted. A cure has yet to emerge, but he is now the CEO of a Wall Streettraded
company, Intellect Neurosciences, Inc., that boasts a large portfolio of
promising patent-protected technologies for the treatment of Alzheimer’s and
other neurological conditions.
Chain, 55, has had his share of ups and
downs, with some of the latter bringing to mind the frustrations faced by his
father, a Berlin-born Jewish refugee who arrived penniless in Britain in the
early 1930s and was often at odds with the British establishment.
first challenge was finding investors. Other than Mansford, few people thought
his idea, based on removing beta-amyloid from the brain using monoclonal
antibodies, could work. “At the time, there was a raging battle in scientific
circles about the underlying cause of Alzheimer’s,” Chain tells The Report
noting there was skepticism both about beta-amyloid being the culprit and about the prospect of using monoclonal antibodies to prevent the build-up of
plaque in the brain.
But soon after Chain applied for his patent,
scientists at several leading pharmaceutical companies began to think along
similar lines. Chain’s invention, he realized, had valuable potential. To
commercialize his discovery, he set up a company, scraping together enough to
get started from a small trust fund his father had set up out of the proceeds of
his Nobel Prize. Rather than stay in the United States, where he had come for
post-doctoral studies at Columbia University in collaboration with Nobel
Laureate, Prof. Eric Kandel, he decided to return to Israel, where he had earned
his PhD in biochemistry at the Weizmann Institute.
The move proved to be
propitious, as venture capital funds in the late 1990s were pumping capital into
the nascent Israeli biotech industry. With backing from large Israeli and
American investment funds, Chain set up Mindset Pharmaceuticals in the Jerusalem
Har Hotzvim Industrial Park. State-of-the-art lab facilities were installed and
Mindset began gearing up for clinical experiments. Though this was his first
business venture, Chain proved adept at acquiring early-stage technologies and
drug candidates at a low cost in order to expand the company’s
Then, in 2003, disaster struck. The Israeli investment fund
reneged on its pledge to provide the cash it had promised and the American fund
was unwilling to continue without the participation of the
Mindset collapsed; the labs were closed, the staff was laid
off, and Chain, who had poured his life savings into the company, was flat
Chain considered going back to academia, but believed that he had
come too close to succeeding to stop. However, he was unable to find anyone else
in Israel willing to invest. Having lived most of his life in Europe, he was
something of an outsider in the local business community. “On top of everything
else, I needed to make an urgent payment for one of the technologies we had
acquired or lose it and thereby forfeit almost everything we had achieved,” he
Chain was reluctant to part from his teenage sons who remained
in Israel, but felt that his only hope was to head back to the US to be closer
to the Wall Street crowd.
And when he arrived in New York in early 2005 a
friend introduced him to a biotech industry pioneer who had been away from the
business world for a number of years.
David Blech, the Brooklyn-born son
of a rabbi, was a stock broker who had been enormously successful as one of the
largest early investors in the US biotech industry and had founded almost 30
companies, many of which continue to be extremely profitable. Sadly, however,
Blech’s genius in identifying promising technologies was counteracted by the
consequences of suffering from severe bipolar disorder and his compulsive
gambling with the latter ultimately leading to his downfall, as he struggled to
keep his companies afloat through illegal trading practices that resulted in a
securities fraud conviction.
At the time Blech met Chain, he was
determined to make a comeback and was in a position to start
Blech, impressed with Chain’s ideas, came up with an initial $2
million to help Chain found a new company, Intellect Neurosciences. The money
was enough to extricate Mindset from Chapter 11 and purchase several of
Mindset’s assets, including the intellectual property that was about to expire
Joined by two former employees of Mindset, Chain quickly
set to work to revive the programs that had been on hold for three years. This
included initiating clinical trials for a promising new drug for various
neurological conditions known as OX1. To advance the development of OX1, Chain
was eventually able to partner with a large company, ViroPharma, which provided
Intellect with a $6.5 million upfront payment.
Under the deal, Intellect
stands to receive up to $120 million in milestone payments and
Chain also put together a string of successful business deals
and licensed his original discovery regarding monoclonal antibodies for
Alzheimer’s to several global pharmaceutical companies. In addition, Chain
diversified the company’s approach to treating Alzheimer’s by acquiring a
vaccine technology that may be able to prevent the outbreak of the disease as
well as lessen the impact on patients that are symptomatic.
early last summer, the company hit one bump in the road after another. In May,
Blech was again convicted of stock market fraud. Chain was not in any way
involved, but the company had lost a major investor.
Next, during the
summer, after the US Patent and Trademark Office granted Intellect a
much-awaited patent, there was another disappointment. The milestone was
supposed to trigger a $2 million payment from Pfizer, one of the pharmaceutical
company licensees, but Pfizer failed to meet its commitment. In October,
Intellect filed a lawsuit against Pfizer.
But most disappointing was the
failure of bapineuzumab in a clinical trial for Alzheimer’s. Bapineuzumab was a
drug co-developed by Johnson & Johnson and Pfizer based on Chain’s idea. He
was somewhat consoled by the fact that most experts concluded that the drug was
given to patients whose disease was too far advanced to show benefit as a result
“Importantly, biomarkers indicated that the drug had
successfully engaged the target, resulting in lowered amyloid plaque load and
reduced neuro-degeneration,” says Chain, pointing out that an improved clinical
trial design could yet lead to more positive results.
setbacks, Chain continues to forge ahead, and has started to work on a new
generation of drugs that he hopes will ultimately translate into effective
“His tenacity reminds me of his father,” recalls Mansford, who
collaborated with Ernst Chain in the 1950s and 60s.
“He has the same
enthusiasm, the same refusal to bow down to what seem to be insurmountable
Mansford also shares Chain’s belief that his insight into the
underlying mechanisms that cause Alzheimer’s will eventually lead to a major
therapeutic breakthrough. When Mansford is asked how it was that no one prior to
Chain had thought of something that now seems fairly obvious to the scientific
community, he smiles. “Most things that now look obvious weren’t obvious when
they were discovered,” he says.