- Cuban and Perlstein came together over a Twitter debate about drug pricing last year.
- Cuban's fund, Radical Investments, put $250,000 into Perlara's $7.4 million fundraising round last year.
- Cuban's investing again, in a project called "PerlQuest" to find treatments for an extremely rare disease called Leigh syndrome.
It's not every day a billionaire Shark Tank investor sends you a direct message via Twitter.
So when Mark Cuban messaged biotech entrepreneur Ethan Perlstein in August 2017 asking for his pitch deck, Perlstein was nonplussed.
"I remember showing it to my wife and saying, 'Is this a joke?'" Perlstein, chief executive of young South San Francisco biotech Perlara, told CNBC. "That was kind of surreal."
That Twitter exchange led to Cuban's fund, Radical Investments, putting $250,000 into Perlara's $7.4 million fundraising round last year.
Now, Cuban's investing again, in a project Perlstein calls a "PerlQuest" to find treatments for an extremely rare disease called Leigh syndrome. The neurological disorder is usually found in infants and typically causes respiratory failure and death within two to three years.
"Potentially saving lives is appealing to me," Cuban told CNBC in an e-mail. He declined to provide the size of this investment, but Perlstein said a typical program requires funding of between $250,000 and $750,000. "Rare/orphan diseases, by definition, have catastrophic consequences for the families affected," he said.
Cuban and Perlstein came together over a Twitter debate about drug pricing last year, and Cuban said by e-mail he plans to do more of this kind of investing.
Perlara calls itself a public benefit corporation, a for-profit company that counts doing good for society among its corporate goals. For Perlstein, that means incorporating patients in the company in a more direct way, and taking a different approach to pricing potential medicines.
"We staked our whole brand on wanting to make a downward dent on drug pricing," he explained.
Perlara's still a way's away from pricing a drug: it plans to start human testing of its first two projects next year, for NGLY1 Deficiency and PMM2-CDG, both extremely rare genetic diseases. Only about 800 people have been identified worldwide with the latter.
It's aiming to tackle both of those through "PerlQuests" as well, a system Perlara established to work with families or patient groups that want to invest in research.
"Right now we're living in a world where those families are told if you just raise a few million dollars for gene therapy, that's your panacea," Perlstein said, referring to technology that delivers a health copy of a gene to make up for one that causes disease.
Perlara aims to find more near-term solutions at a lower cost by creating disease models in worms, flies, yeast or fish, for example, and then screening existing compounds to see if there may be therapeutic activity.
"For a tenth of the cost, we're building animal models and finding repurposing opportunities," Perlstein explained.
The goal, then, isn't necessarily a cure, but a therapy that can help treat the disease for the years it may take to develop one.
That's the focus of Cuban's investment to develop treatments for Leigh syndrome, a severe neurological disorder that can be caused by mutations in one of more than 75 different genes.
"Families affected by rare disease are ready to move mountains, but they lack the financial resources to do so," Cuban said in a statement from Perlara. He said by e-mail he does expect a return on his investment, "but we aren't looking to maximize ROI. We are looking to maximize health and wellness."
He noted a successful treatment for the disease could also hold implications for "aging, sports medicine, traumatic brain injury, neurodegeneration and other indications."
As for drug pricing? Cuban's still interested in in it, pledging to "significantly reduce the pricing of all orphan drugs we invest in."
So far, Perlara is his only investment in drug discovery or development, he said.
His take on the industry's pricing practices more broadly is blunt: the "price of drugs," he said, "is too damn high."