Neuronautics is a biotech startup founded by Northwestern University professors to develop treatments and diagnostics for Alzheimer's disease. The company aims to halt or reverse the progression of Alzheimer's by preventing the formation of tau proteins that are believed to play a role in the disease. Neuronautics is testing thousands of drug compounds daily in animal models and hopes to begin clinical trials within a few years. However, the company has only raised $1.1 million to date and is seeking more private funding to accelerate its research.

1. November 2001
Neuronautics seeks Alzheimer’s cure
By Jeff Meredith
In the United States it is estimated that 4 million people suffer from
Alzheimer's Disease (AD), a debilitating neurodegenerative condition
marked by the death of nerve cells in the brain and the loss of memory
and learning functions. Common in older people - ten percent of adults
over 65 develop AD, as well as 50 percent of those over 85 - it could
become an even bigger problem as the baby boomers inch toward
retirement. No one knows what causes the disease and there is no
cure.
For Neuronautics, an Evanston company operating out of
Northwestern's business incubation facility (managed by the
University's Office of Strategic Initiatives), this provides both
motivation and an opportunity to enter a multibillion dollar
marketplace. Co-founded by Lester Binder, a professor of cell and
molecular biology at the Northwestern University Medical School,
Neuronautics aims to halt or reverse Alzheimer's progress and to
develop diagnostic tests to help identify patients before they become
ill.
Binder believes the disease is caused by a substance called tau
protein, which can collect and form neurofibrillary tangles, capable of
killing brain cells. Autopsies of Alzheimer’s' victims commonly reveal
both neuritic plaques and these tangled bundles of fibers. While it is
not clear what causes these changes in brain tissue, Sam Khatami, co-
founder and vice president of operations, notes that there is significant
evidence that tangles play a role.
"It's been shown that you can actually artificially form the tangles and
kill the cells, " said Khatami.
He says the company's goal is to intervene and diagnose the condition
early. In testing thousands of drug compounds per day, Neuronautics
is looking for something that can prevent tau polymerization, meaning
the formation of tangles. Khatami said the company is also looking at
ways to tag tangles, or provide a brain image using compounds that

2. bind to the structures. This is the company's diagnostic intent, which
would leverage neuroimaging applications like PET scans.
"We feel until we make some significant progress in therapeutics,
diagnostics may not have much meaning," said Khatami. "But it's
(diagnostics) actually a much bigger market than therapeutic: once
you have the therapeutic, anybody 60 to 65 would want to get tested."
Neuronautics is currently working with two groups on animal models
that will help evaluate the potency of certain drug compounds. The
University of Massachusetts is providing access to a unique system
using lampreys and a mouse model is also being sought with another
partner.
Khatami's hope is for clinical testing in a year or two. But he added,
"You can't get there with $600,000." That's all the company has gone
through since its origin in 1998, and it currently has 3 employees.
Neuronautics has raised $1.1 million to date and is seeking at least $1
million in private equity funding. This money will help accelerate
animal testing and Khatami mentioned the possibility of bringing a
salaried CEO on board - as it currently stands, much of the company's
team is in academia and cannot fully participate with the company.
Binder is a professor, as is Ferid Murad, a director, investor and board
member known for winning the 1998 Nobel Prize in medicine.
Murad, who teaches at the University of Texas, was recently on a
fundraising mission for the company in China. The capital picture is
especially difficult, but Neuronautics has succeeded raising some
funding from a variety of public and private sources. The company
received a $100,000 grant from the NIH, has received a $500,000
investment from a Japanese pharmaceutical company, Fujisawa, and
another $300,000 from private investors was matched by the Illinois
Development Finance Authority earlier this year.
But Khatami feels a little overwhelmed. "I haven't had a vacation in so
long," he said. "I enjoy what I do, but I feel like I am so committed to
this." Khatami labors away for long hours in the lab testing drugs, but
his mind also turns to grant proposals and patents. He doesn't have a
secretary or communications team, he routinely works on holidays.
But he's still finding creative ways to move forward with his company

3. as evidenced by the $400,000 worth of equipment in his lab which
only cost him $10,000 to accumulate for use.
And at the heart of his quest, he finds meaning.
"It's a good cause," said Khatami. "It's great to come up with
something to slow down the progress of this disease."