Scientist builds drug development company out of research lab

When Cathryn Nagler set out to develop drugs to treat childhood food allergies, she knew she was heading into unchartered territory. Although Nagler, the Bunning Food Allergy Professor, has been a research scientist for more than 30 years, she had no plans to go into business.

“Some scientists are very interested in entrepreneurship,” she said. “I’m not one of them.” Yet, she started a new company called ClostraBio and less than a year later, it has incorporated, received funding and hired its first employee.

The process has involved the Institute for Translational Medicine, the Polsky Center for Entrepreneurship and Innovation and its Innovation Fund, the Institute for Molecular Engineering , the Booth School of Business, and the University’s Biological Sciences Division. “Being able to form this company across all of these different parts of the University is pretty amazing,” said Nagler. “I’m just very, very grateful to have this opportunity.”

ClostraBio aims to develop drugs that will harness protective bacteria and substances they produce in the complex microbiome of the gut. These keep the gut’s lining healthy and create a barrier that stops allergens from entering the bloodstream and inducing an immune response. The failure of this “barrier response” has been one of the focuses of Nagler’s research. “Clostra” is Latin for “barrier.”

In 2015, Nagler and her team identified differences between the gut bacteria of infants who had cow’s milk allergies and those of healthy infants of the same age. With this discovery, Nagler received a technology pilot award from the Institute for Translational Medicine and teamed up with Jeffrey Hubbell, the Barry L. MacLean Professor of Molecular Engineering Innovation and Enterprise, to launch ClostraBio.

Hubbell, a materials scientist, designs compounds that can stimulate the immune system. He is also a serial entrepreneur who has founded three companies and has 77 patents bearing his name. Hubbell’s role in ClostraBio is to create a synthetic version of a bacterial product that regulates the barrier and immune system functions in the gut, which Nagler will test in her mouse models to demonstrate that it creates a barrier against allergic sensitization.

Building a company

Early on, Nagler was introduced to Jason Pariso, director of the UChicago Innovation Fund at the Polsky Center. The fund’s charter is to “move discoveries and inventions created at the University and the labs we manage out into the world so that they can have an impact,” Pariso said. They do what Pariso calls “venture philanthropy,” investing in promising ideas and helping prospective startups get off the ground.

The fund provides mentoring, business expertise and connections. Teams of students in its associates program look deeply into the pros and cons of each prospect, research potential markets and help the fund decide where it should invest. ClostraBio looked like a good candidate, and Pariso thought one of the fund’s senior associates, John Colson, would be a good fit to help Nagler develop her concept and work on a pitch for investors.

Then an IME postdoctoral fellow, Colson has a PhD in chemistry and came to UChicago with the explicit goal of learning more about business so that, at the end of his fellowship, he could join an entrepreneurial venture. “I made a very conscious effort to be involved in as many programs as I could here at the University of Chicago that would support that,” Colson said. Polsky and the Innovation Fund gave him the opportunity to sit in on some Booth classes, as well as the chance to do the hands-on work of due diligence.

“Because of all the different kinds of mentorship that Polsky has wrapped around this effort, we’re aware of things that other developing companies may not be aware of.”Prof. Cathryn Nagler

Colson jumped into the ClostraBio project with both feet, even as he continued to work full time on his research at IME. “When you find a project that excites you the way this one did, it can be easy to find the energy,” he said. “I’m grateful that IME and my advisers were so supportive of entrepreneurial activities and gave me the flexibility to pursue both.”

Matt Martin, Polsky’s assistant director of Technology Commercialization and Licensing, began advising Nagler and Colson on how to define and protect ClostraBio’s intellectual property. “Utilizing Polsky’s external intellectual property attorneys and our team’s licensing experience, we’re helping Cathy and John understand and articulate ClostraBio’s proprietary position,” said Martin. “We are helping them think about this from the perspective of what matters most to investors and other stakeholders.”

Martin also provided the resources to bring Nagler and Colson into Chicago Innovation Mentors, a regional mentoring program for startup companies coming out of universities. CIM operates out of MATTER, a healthcare startup incubator located in Chicago’s Merchandise Mart. Nagler and Colson meet regularly with dedicated mentors who help them think through what is needed to grow ClostraBio. “Because of all the different kinds of mentorship that Polsky has wrapped around this effort, we’re aware of things that other developing companies may not be aware of,” Nagler said.

Getting funding was an important milestone for the company. Earlier this year, ClostraBio received an initial investment of $800,000 to fund the next year of operations. This allowed Nagler to hire the company’s first employee; as of Sept. 1, Colson is now ClostraBio’s project manager, in charge of business operations, developing relationships with potential partners, manufacturers and suppliers, and navigating the arcane realms of insurance and compliance. “I’m very happy to embrace this journey,” he said. “I would not have the knowledge and skill set had I not been involved with Polsky’s programming and with the Innovation Fund. I don’t think I would be in this position without their support and guidance.”

The company is currently participating in the Polsky I-Corps program, in which Colson and Nagler will take a closer look at market opportunities for the business. I-Corps runs for seven weeks and provides entrepreneurship training from Polsky staff and funding from the National Science Foundation. ClostraBio was also a featured project at Polsky’s Sept. 26 Collaboratorium event, which allowed Nagler and Colson to recruit two Booth first-year MBA students—Renuka Agarwal and Corey Ritter—to join ClostraBio’s I-Corps team.

Thinking over the past year of ClostraBio’s inception, Martin catches himself referring to it as “a drug development company.” “It’s actually an impressive accomplishment that I reflexively refer to it that way,” he said. “Just 12 months ago it was a science project in the lab of somebody who didn’t want to be an entrepreneur. Now it’s a drug development company. That’s pretty cool.”

This research is supported by the National Center For Advancing Translational Sciences (NCATS) of the National Institutes of Health (NIH) under Award Number 4 UL1 TR 000430-09. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.