Billionaire Carl Berg developing prostate cancer test

In In The News by Barbara Jacoby

Silicon Valley real estate billionaire Carl Berg thinks he’s found a better prostate cancer test, and he’s investing hundreds of millions of dollars to bring it to market.

Berg LLC plans to introduce a blood test that promises to more accurately detect who’ll develop the cancer, including the millions of men who show signs of the malady yet may never develop it. The closely held company has collected hundreds of thousands of tissue samples from the Defense Department and analyzed the trillions of protein and gene combinations to find common markers.

“I was tired of real estate,” Berg said. “I decided I was going to change my course and go for two or three companies that basically have a chance to revolutionize the world.”

A quarter of a million men in the U.S. will get prostate cancer this year. Almost 30,000 of those will die, according to the American Cancer Society. Testing for the cancer using the prostate-specific antigen, or PSA, is a $3 billion market. It’s an imperfect science and leads to enough unwarranted biopsies and treatments that the Canadian Task Force on Preventative Health Care recommended this week that doctors stop using it.

“It just doesn’t work,” James Dickinson, a professor at the University of Calgary and a member of the task force, said by phone. Abbott Laboratories and Eli Lilly & Co. are among the major pharmaceutical companies offering PSA tests, he said.

Berg says he sold his development company, Mission West Properties Inc., two years ago to focus on efforts more fulfilling than building office space for technology startups. The decision came as Berg LLC, which he founded nine years ago, showed promise of bringing multiple tests and treatments to market. In addition to the prostate test, Berg has a tumor drug, BPM 31510, in Phase 2 trials and is researching cures for Parkinson’s disease.

Leading Berg’s effort is Niven Narain, former head of skin cancer research at the University of Miami Miller School of Medicine. Narain met Berg almost a decade ago after Mitch Gray, one of Berg LLC’s investors, approached him to consult on a skin care line they planned to build around Sea and Ski, a suntan lotion popular in the 1970s they’d acquired. Early tests showed the lotion had some anticancer properties, although at levels too low to be effective in patients, the billionaire said.

Berg became intrigued by Narain’s proposal to find other potential treatments through the use of supercomputers to analyze swaths of tissue and patient data. The technology angle struck a chord with Berg, who had invested in hundreds of technology companies beginning in the 1970s, including Sun Microsystems and Integrated Device Technology.

The billionaire said he avoided investing in biotechnology companies, primarily due to the regulatory risk posed by the Food and Drug Administration.

Risk taking

“You have to go out there and believe what you’re doing,” he said. “I believe this was so revolutionary, I was willing to take that kind of risk.”

Narain expects the company’s test will most benefit the men who have an elevated PSA with no other indicators of cancer and have to get regular biopsies to determine whether they’re developing the disease.

“That’s the unmet need,” Narain said. “That’s where our markers work best.”

The vast majority of men middle-aged and older will show signs of prostate cancer in a PSA test, said Dickinson. Many of those come from cells that won’t turn cancerous or will become such a slow-growing cancer that the patient will probably die from natural causes before the prostate cancer kills him.

“The potential market is huge, because so many men carry prostate cancer cells around with them,” Dickinson said. “It’s a matter about finding something that’s going to distinguish between the important ones from the non-important ones.” Many companies have had promising PSA test replacements that have failed to come to market, he said. “This is really, really difficult stuff.”

Industry professionals laughed at Narain’s plan to use big data in the early days of the company because the approach differs from how most pharmaceuticals are developed, the executive said.

No one is laughing anymore. The Pentagon teamed with Berg to help develop the prostate cancer marker based on exhaustive data the military has gathered from its members. It’s probably the best set of samples in the world, Narain said.

Berg also secured another sample set to tackle Parkinson’s disease. Researcher J. William Langston is allowing Berg to use his 25 years of tissues and samples to hunt for a Parkinson’s cure, the first time Langston has ever allowed anyone to access his collection, Narain said. The company just finished building the model with the data.

“We screen chemical compounds, take them through clinical trials, get them on the market and then see what happens on a mass population,” Narain said. “Why not flip that model? Take samples and tissues from patients and understand what’s going on with the disease, understand the biology first.”

Data points

Part of the industry’s skepticism to Narain’s approach involves the high number of data points involved in screening tissue samples, each of which has 30,000 genes with 5,000 proteins plus lipids and metabolites that combine for 375 trillion possible combinations to study.

“Twenty years ago we couldn’t have done this without access to all the government supercomputers,” Narain said, walking through the white-walled labs where most of the company’s 200 employees work. Among the rooms of technicians, a few refrigerator-size servers analyze tissue samples. When he needs more computing, he uses cloud services from Amazon.

Berg, who said he’s invested “hundreds of millions” of dollars into Berg LLC, hasn’t taken outside money. He expects to raise money with an initial public offering, selling a drug or division off, or licensing a treatment for an initial payment plus royalties of 40 percent.

Nothing is imminent, said Berg, who is worth $1.3 billion, according to the Bloomberg Billionaires Index. He also owns Valence Technology, a lithium-ion battery maker, and is the largest shareholder in Via Motors, an electric-engine developer and Skyonic, a carbon sequestration and capture company.

When selling Mission West, Berg bought the company’s campuses used by Apple and Microsoft for about $500 million.

“I kept those two real estate entities so they can pay the bills and I can play these games,” Berg said.