Arlene Weintraub wrote:

It wouldn’t be much of an over-statement to say Cambridge, MA-based Agios’ $150 million cancer-drug development deal with biotech giant Celgene is unprecedented. At least not in the view of Kevin Starr, a partner at Third Rock Ventures, which helped found Agios in 2008, providing part of its $33 million Series A funding. In April 2010, Summit, NJ-based Celgene (NASDAQ: CELG) poured its first $130 million into Agios, and on Oct. 5, it extended the deal to four years from three, for another $20 million. “From a size standpoint, this is the largest partnership we have among any of our portfolio companies by a wide margin,” Starr says.

Agios and Celgene are working on a new class of drugs designed to starve cancer cells of key enzymes. Celgene had the option to extend the deal under the original agreement, but virtually no one expected the company to exercise that right so soon. Although Agios has identified several lead clinical candidates, it could be as long as two years before any of them are ready for human trials, says Agios CEO David Schenkein. “What’s most important to us is not the dollars” involved in the Celgene deal, Schenkein says, “but the statement Celgene is making. It shows they’re confident in Agios as a partner.” Celgene has the right to extend the deal again, as well as an exclusive option to license any of the drugs for an undisclosed period of time.

Cancer metabolism is the study of enzymes that alter the metabolism of cancer cells by feeding them nutrients they need to grow. Depriving tumors of such mutated enzymes could be an efficient method for starving the cancer to death. The field is so promising that drug giants ranging from AstraZeneca (NYSE: AZN) to GlaxoSmithKline (NYSE: GSK) have embarked on their own internal efforts to find drug targets based on the rapidly expanding understanding of how cancer metabolism works. Thomas Daniel, Celgene’s president of research, believes Agios is emerging as a clear leader. “The earlier-than-planned trigger on the investment shows our enthusiasm for Agios, the collaboration, and the progress being made,” he says.

The story behind the Agios-Celgene alliance could serve as a blueprint for other biotech startups that want to gain an early foothold—both scientific and financial—in a hot emerging field. Starr, who served as the company’s founding CEO, describes the company’s first nine or so months as a carefully calculated effort of integrating diverse scientific disciplines, translating a broad idea into solid intellectual property, and ultimately finding a partner with deep pockets and a common vision.

Agios’s scientific co-founders were three of the most renowned pioneers of cancer metabolism: Lewis Cantley of Harvard Medical School, Tak Mak of the University of Toronto, and Craig Thompson from the University of Pennsylvania, who is now CEO of Memorial Sloan-Kettering Cancer Center in New York. “They had a collective ‘ah-hah’ moment,” Starr says. “They discovered that targeting certain metabolic enzymes could fundamentally alter cancer pathways.” In order to turn that discovery into a company that could be “a prolific discoverer of new products,” says Starr,Agios put together a scientific advisory board of more than a dozen experts in cancer metabolism, including David Sabatini of the Whitehead Institute and MIT, Charles Sawyers of Memorial Sloan, and Homer Pearce, an Eli Lilly retiree.

Then the company locked up as much intellectual property as it could in cancer metabolism, Starr says, while at the same time building a discovery platform that merged two separate disciplines: oncology and metabolism. “To discover what those metabolic pathways are doing in cancer, we needed to build joint insight,” Starr says. “A big pharma company might have expertise in both cancer and metabolism, but it’s difficult for them to merge the two. When you’re a new company, it’s more straightforward.”

Knowing that Agios would eventually need a partner to help finance human trials, the startup team started talking to Big Pharma companies early. “In our first month, when we had only about five employees, we were already talking to them,” he says.

The company also worked hard in its early days to get on the scientific radar by submitting papers to medical journals. It had its first paper published in Nature in November 2009. The research described how a mutated gene called IDH1 produced a metabolite, which in turn seemed to contribute to some malignancies, including glioma, an aggressive and common form of brain cancer. “That showed the potential partners we were talking to that this vision could become reality,” Starr says. “It opened a lot of eyes.”

Celgene’s Daniel says his team has been wowed by a procession of research Agios has published since then, as well as what he describes as “a large body of unpublished data.” The research suggests that the metabolite produced by IDH1 may influence epigenetics—the molecular changes in cells that turn genes on or off without affecting the underlying DNA. Celgene is one of the leading makers of epigenetic drugs for cancer, with two such products: azacitidine (Vidaza) and romidepsin (Istodax). “We are interested in how epigenetic modifiers can be therapeutically valuable,” he says. And Celgene is already thinking about how drugs that target cancer metabolism might be useful in combination with its already marketed products, he adds.

Agios’s Schenkein—who joined the company in May 2009, after a stint at Genentech (now owned by Roche)—calls Celgene “an ideal partner.” The two companies meet once a quarter during a joint research committee meeting, when scientists from Celgene offer guidance and feedback on the data being generated. But virtually all of the research is done at Agios, with the startup free to make the final decisions about how to proceed with clinical candidates. The financing, adds Schenkein, has allowed Agios to build its ranks from 20 employees in the summer of 2009 to 60 today. “That allows us to go after multiple targets simultaneously,” he says.

Although the Celgene partnership will continue to focus exclusively on cancer, Agios’ scientists are already thinking about how their insights into cellular metabolism might be applied to other diseases. Schenkein declines to elaborate, except to say they’ll be ready to talk about those targets “shortly.”

All in all, adds Starr, Agios’ careful startup strategy has landed it in an enviable position in biotech. “This company,” he says, “has lots and lots of options.”